The Senate tax bill got an excellent last-minute improvement

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Did you know that there was a last-minute change to the Senate tax bill?

And get this: It could be a great benefit to Catholic families.

Sen. Ted Cruz, R-TX, came forward with a proposal to allow 529 savings accounts to be spent on private, religious, and homeschool tuition and expenses. Currently, such 529 accounts can only be spent on tuition and expenses for college.

Columnist Ryan Ellis spells it out over at Forbes:

“529 plans can be thought of as the rough equivalent of Roth IRAs for education–money goes in after tax, but then grows tax free. Distributions are tax exempt if used for qualified education expenses. If you participate in your home state’s 529 plan (these accounts are mostly run by state agencies), you may be eligible for a state tax deduction.

“If the Cruz amendment makes its way into the final bill (and there is nearly identical language in the House version, so there is a good shot of this), the game will have changed on school choice. Parents can start saving right away for private or parochial school, or for homeschooling expenses, in a 529 plan when a child is born. That money can grow tax-free for years to pay for things like Montessori school, Catholic high school, or home schooling networks. With a tax deductible component in most states, parents will get an immediate tax benefit, and then further tax relief in the form of tax-free growth.”

The Senate bill already lowered the tax rates in many brackets and doubled the Child Tax Credit to $2,000. Senator Cruz’s expansion of 529 accounts for K-12 private, religious, and homeschooling is another great feature of the bill.

This is a great first step in helping parents who already pay for education twice: Once in property taxes for their local public schools and a second time for their Catholic school or homeschool.

Another reason CV is urging passage of this tax reform bill.

The views expressed here are those of the author, and do not necessarily represent the views of CatholicVote.org

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Brian Burch is President of CatholicVote.org.

2 Comments

  1. Why, then, should people who exercise their right to send their child to a public school face double taxation for doing so? Why should tax shelters exist solely for those sending their kids to private school?

    Since both the Senate and House bill eliminate deductions for local taxes and cap property tax deductions, I’m struggling to understand why we as Catholics should support this. Low-income Americans without the means to send a child to a private school should not be disadvantaged in our nation’s tax structure because of their income. Likewise, wealthier Americans who can afford private schooling should not have tax advantages.

    Treat all citizens the same. This clause is one of many reasons why I do not support this bill.

    • What “double taxation”, Ben?

      Public school funding comes from state/local property tax levys. So, I pay the assessment, no matter if I have the Cruz thing here or not.

      Public schools don’t charge tuition. Why would I need a savings account for public K-12 tuition when there’s no charge for it?

      The Feds don’t set local property tax levys. The States/local school districts do that, Ben.

      The tax plan here does NOTHING to local school funding. Not a thing. The taxes are levied locally.

      People who are low income who do not have the wherewithal for private school pay their property taxes, just like those who DO have the wherewithal to send their kids to private school pay them. Everyone’s treated the same.

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