Education tax bill to be wrapped into tax reform debate

Top tax writers want to insert a new bipartisan bill to streamline tax credits for higher education into a broader reform bill, the measure’s sponsors said Wednesday.

The new bill from Reps. Diane Black (R-Tenn.) and Danny Davis (D-Ill.) merges four separate provisions and makes permanent the new American Opportunity Tax Credit, which is currently in effect through 2017.

House Ways and Means Chairman Dave Camp is currently pressing ahead with his efforts to dramatically overhaul all of the tax code, and Black told The Hill on Wednesday that she expected her new proposal to be a part of that process.

“There has been an indication that they would like to wrap this in,” Black said. “So we’re just going to move forward with that being the thought at this point in time.”

Davis and Black’s proposal grew out of their work on a Ways and Means working group created Camp and the panel’s ranking member, Rep. Sandy Levin (D-Mich.).

In a news conference, the two lawmakers said that committee leaders took great interest in their work, and that education advocates from across the political spectrum said that tax breaks for college could be modernized.

The bill is also not revenue-neutral, Black said on Wednesday, another reason that it would likely get wrapped into the broader tax reform debate. Plus, House Republicans have been loathe to pass tax bills, believing that could give the Senate a vehicle to push for further revenues.

That revenue divided has left many skeptical that tax reform can happen before the next Congress, and Democrats on Ways and Means have complained recently that they feel increasingly left out of the process.

Still, the new education measure also got applause from both sides of the aisle on Wednesday.

“During the working groups, Diane Black and Danny Davis made it clear that the complexity of the tax code was actually making it harder for families to afford the cost of higher education,” Camp said in a statement. 

“They addressed that challenge head on and developed a solution to make the tax code simpler and fairer for families, making it easier for families to send their kids to college.”

Sen. Chuck Schumer (N.Y.), the chamber’s No. 3 Democrat, also praised Black and Davis for releasing their proposal. Schumer pushed in 2012 to ensure that the American Opportunity Tax Credit was extended in the fiscal cliff deal.

“Making it easier for families to save on their taxes with kids in college is a good thing,” Schumer told The Hill in a statement. “It’s not exactly what we have proposed, but the goal is the right one.”