Magazine article Black Issues in Higher Education

WASHINGTON UPDATE: Tax Plans Spur Debate

Magazine article Black Issues in Higher Education

WASHINGTON UPDATE: Tax Plans Spur Debate

Article excerpt

WASHINGTON UPDATE: Tax Plans Spur Debate

Got an extra $800 billion lying around? Long beset by budget woes, the federal government now has that extra money, but Republicans want to use it for massive tax cuts.

Plans approved by the full House and a Senate committee would provide tax relief for individuals and corporations -- and provide a few education-related benefits. But critics, including the White House, say it will take funds away from needed national investments, including education.

"Tax cuts that size quite simply are bad economic policy," says President Clinton, claiming Congress simultaneously is considering cuts in education funding. "It is certainly bad to cut education at a time when it's more important to our children's future than ever."

The Senate tax bill does contain several education-friendly provisions. It would end the five-year time limit from which students can deduct interest on their educational loans and ease income limits so that more moderate-and high-income earners could deduct their loan interest.

For example, individuals earning above $40,000 a year and couples earning more than $60,000 annually will gradually begin to lose their ability to deduct loan interest because of income. Under the new bill, the deductions would not begin to phase out until $50,000 for an individual and $100,000 for joint filers. …

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