ST. PAUL, MINN – Senator Greg Clausen (DFL-Apple Valley) released the following statement on the recent federal tax reform proposals:
“Education has always been a pathway to a better future. However, after reviewing information contained in the drafts of the federal tax proposals, I have serious concerns regarding the impact current legislation will have on education in Minnesota,” said Sen. Clausen. “The House bill is estimated to disinvest more than $111 billion from higher education and includes provisions which will have negative consequences for our public E-12 education system. As our students face a growing economic burden from educational loans, it is baffling Congress would decide to eliminate important tools for relief.”
“Higher Education is targeted from all angles in the current version of the House proposal, affecting families, students, graduates, institutions and scholarships through the elimination of important benefits and increases in taxes,” Clausen continued. “The proposal would eliminate the Student Loan Interest Deduction, private activity bonds, Lifetime Learning Credit and Employer-Provided Education Assistance. It would also levy a new tax on college endowments, which help provide student scholarships, and classify tuition assistance and stipends for graduate students as taxable income, raising their tax burden by more than 100 percent in some cases.”
“In addition, the House proposal would eliminate the $250 expense deduction for teachers who purchase eligible school supplies, affecting roughly 55,000 Minnesota teachers,” Clausen added. “The legislation also expands 529 college savings accounts to be used toward K-12 education expenses at private schools. I have been a strong champion for these savings accounts, authoring legislation that authorized new Minnesota tax incentives for contributions to 529 plans. But these accounts would no longer be powerful savings tools for working families, and instead become tax shelters for families that are already financially comfortable while forcing taxpayers’ money to support private education subsidies.”
“This tax proposal is a direct attack on students, working families, teachers and our education institutions. These proposals make it clear that cuts to taxes for corporations and the wealthiest Americans will be paid for on the backs of students, working families, teachers and our education institutions. If we truly wish to grow our economy, it cannot be done by cutting support for higher education. A well-educated workforce is required for a strong economy and is one of Minnesota’s greatest assets. This proposed tax plan will work against students and our ability to fund future workforce needs. I urge Minnesota’s congressional delegation to slow down and rethink the priorities of this ‘reform,’” Clausen concluded.