"The U.S. Senate early Saturday morning narrowly approved major tax legislation roundly opposed by higher education leaders and student groups. The bill, like the House of Representatives' tax plan passed last month, got no public hearings and senators themselves complained they had no opportunity to read the legislation even as last-minute amendments were offered affecting issues like private college endowments and education savings plans," Inside Higher Ed reports.
"The 51-to-49 Senate vote sets up negotiations with House leaders over substantial differences between the two bills. Most in higher education view the House version as substantially more harmful for students and colleges than the Senate bill, but many also have major concerns about the Senate legislation.
Both bills would create significant potential new tax burdens for higher education institutions and would, college leaders predict, adversely affect charitable giving and state budgets that support public colleges and universities.
Senate lawmakers approved multiple amendments Friday to provisions that would affect higher education. One allows taxpayers to deduct only up to $10,000 for state and local property taxes. Previous language eliminated state and local deductions entirely. Even with that change, however, higher education leaders say the cap could put strains on state budgets. The fear is that wealthy taxpayers in states that invest substantially in public colleges and other services will push to cut spending generally, since they will no longer receive a tax break on their state and local payments.
Like the House bill, the Senate legislation imposes a new 1.4 percent excise tax on the largest endowments held by private colleges. But thanks to an amendment offered Friday, the tax will apply only to endowments valued at $500,000 per full-time student. Previously, that provision would have applied to endowments valued at $250,000 per student. But although the tax will apply to only the wealthiest private institutions, higher education leaders call it a flawed idea that sets a worrying precedent.
Another amendment blocked by senators Friday would have specifically exempted from the endowment tax Hillsdale College, a private institution in Michigan with ties to Betsy DeVos, the secretary of education, and an institution praised by many conservatives."
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Publication Date: 12/5/2017