Fwd: Call for Action re Tax Cuts and Jobs Act

---------- Forwarded message ----------
From: Valerie Smith, Swarthmore College

Dear Members of the Swarthmore Community, Late last week I joined Haverford President Kim Benston and Bryn Mawr President Kim Cassidy '85 in sending a slightly modified version of the following letter to our elected officials in Washington. It expresses why the recently proposed House version of the Tax Cuts and Jobs Act will directly harm higher education in this country. The Act includes a number of changes to the tax code that will significantly increase the cost both of college and of student debt. While the Senate version of the bill is not quite as onerous, it also imposes new excise taxes on private college and universities, and it does not appear to provide the long-promised middle class tax "relief." I write now to urge you to familiarize yourself with this quickly unfolding legislation, which will almost certainly change again, and to ask you to consider texting, emailing, and/or calling your representatives in the House and Senate to stand with us in opposition to the bill, in whole or in part. Sincerely, Valerie Smith President *************************** At a time when lawmakers and the public should be keenly focused on lowering college cost and student debt burdens, this bill makes higher education in America more costly and less accessible. It harms higher education in the following ways: • New excise taxes on approximately 70 private college endowments will take millions of dollars away from needy students and vital college operations. Endowment income plays a major role in maintaining financial aid and covering educational costs. The taxation of this income will weaken access to college, academic programs, and physical plants. It will directly cause job losses at many colleges and universities (thereby hurting local economies). Simply put, taxing our endowment will seriously harm our ability to support our academic mission, our commitment to public engagement, and our determination to make a liberal arts education accessible and affordable to all qualified students. It will almost certainly divert resources away from helping students. • The elimination of colleges' access to tax free funding (via the municipal bond market) will hurt their ability to build and maintain educational facilities at a reasonable cost. Here at Swarthmore, we have issued our debt through the Swarthmore Borough Authority, thereby benefitting our broader community. While this provision was excluded from the Senate bill, it remains in the House proposal. • The elimination of itemized deductions among 95% of taxpayers will greatly reduce charitable giving, as will the elimination of the estate tax. The loss of this support will directly reduce giving to charitable organizations, including Swarthmore, and would affect both financial aid for students in need and educational programming that prepares students to be productive citizens. • Three repeals that penalize students—the repeal of the deduction for interest on tuition loans; the repeal of the Hope Scholarships Tax Credit; and the repeal of the Lifelong Learning Credit will make it harder for Americans to afford college tuition and will significantly increase student debt. The result will be less educated and less solvent citizens.  •  The House and Senate bills both propose taxing benefits that colleges and universities typically provide for their employees. Most significantly, the proposals would tax dependent tuition benefits as well as educational benefits for employees. Other benefits, such as access to our health facilities could be taxed as well. These proposals will add a burden on our employees and run counter to our deeply held belief in the value of education and wellness. In addition to the negative practical consequences of this bill, it sets a dangerous precedent. Much of the money in our endowment is the result of charitable donations from individuals looking to provide scholarship and aid for students and to advance the pursuit of education and knowledge for the next generation. With this bill, the federal government is replacing the donor's intent for the use of their funds with the government's intent, setting a dangerous precedent for all charitable giving in America. The cumulative result of these tax changes will be losses in jobs and national economic health; educational access and quality; innovation and discovery; and American global competitiveness.  For over a century, the United States has offered higher education that is the envy of the world, enhancing our global standing and competitiveness. The proposed legislation will do lasting damage to our system of national education, hurting us at home and abroad for countless years to come. Although this bill is framed as a way to make colleges more affordable, we believe it will have the opposite effect, as colleges may be forced to move funding allocated for scholarship and aid. This will directly harm students and their families. We urge you to reject or significantly amend this harmful bill.

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