What’s at Stake in the Tax Bill

The Trump administration is poised for a major legislative achievement: a tax cut that promises an economic stimulus not seen since the Reagan era.

The House and Senate have each passed their separate versions of the tax bill and are getting ready to meet for the purpose of hammering out a single text acceptable to both chambers.

The legislative package in question is a complicated one, and not everything in it gets the attention it deserves in congressional committee rooms and in the media. The biggest issues get the lion’s share of the attention. These include the proposal to reduce corporate taxes from 35 percent to 20 percent; a reduction in taxes on corporate earnings abroad; and a new 23 percent deduction for pass-through income, affecting a range of small to large businesses.

About 93 percent of households would receive an immediate tax cut according to the Senate version, but critics say that the gains for the middle- and low-income sectors would be meager compared to the rich. The bottom 20 percent of households would receive an average cut of just $40 in 2019, nothing compared to the upper brackets.

Such are the issues generating the most heat and garnering the most attention. This is unavoidable. But it tends to obscure certain other important issues. Indeed, reading the mainstream media reports on the tax bills, you would not know about them at all.

For the Orthodox Jewish community, there are two provisions of the draft bill which are of particular concern: the Qualified Tuition Reduction (QTR) and expansion of 529 accounts to K–12.

These two items can’t compete with the excitement factor of historic tax cuts, but for our community and its educational institutions they are crucial.

Congress should retain QTR, which provides tax benefits to teachers and school administrators. If, in the welter of legislative give-and-take, QTR gets left out, it would not only have serious tax consequences for them, but it could bump them into tax brackets that would force some of them to lose certain social service benefits.

While our financially strapped yeshivos often find it difficult to offer competitive salaries, this benefit makes it easier for them to still hire high-quality educational and executive staff. And, it is ultimately a benefit for everyone in the school and community, as it helps keeps a lid on high tuition costs.

The expansion of 529 accounts to K–12 would allow tax-free withdrawals from education savings accounts for private school tuition and other expenses. This will help segments of our schools’ parent bodies. It is a good and important first step that can be built upon on the state and federal levels. While it is in both bills, it was narrowly passed in the Senate and has come under fierce attack by anti-school choice advocates.

The lawmakers in Washington are working on this bill in a pressure-cooker environment. They are aiming to complete revisions in time for passage of the new tax law before the end of the year. At the same time, they will have one eye on the unresolved budgetary issues that still threaten a federal shutdown.

The Qualified Tuition Reduction (QTR) and the expansion of 529 accounts to K–12 are not the national make-or-break issues that are currently preoccupying negotiators between the House and Senate working to reach a final compromise.

If their constituents don’t insist that they take these provisions into consideration and protect them, they could easily slip through the cracks. As such, it is imperative that the Conference Committee hears from us.

As important as it is to vote for candidates who will represent our interests, it is important to follow up at times like these and remind them exactly what those interests are, and how we think they should vote on them. If they don’t hear from the Jewish communities on these matters, they may be justified in feeling that they are not so urgent for them, and may be willing to make concessions or tradeoffs that could reduce or eliminate these benefits.

Now is the time to call or write to your senators and congressmen. Even a brief message in support of these measures will have an impact. It will force them to take note and help to ensure that the interests of our communities are safeguarded in these days of decision.

This is the time to make our votes really count.