Education Savings Accounts Reintroduced
Joined by a group of schoolchildren and a banner reading "Save for Students," Representatives Kenny Hulshof (R-Missouri) and William Lipinski (D-Illinois) introduced on March 10 the House version of Georgia GOP Senator Paul Coverdell's Education Savings Accounts (ESA) legislation.
The ESA bill allows parents to use tax-free dollars to pay for educational expenses from kindergarten through college. Similar legislation was approved in the 105th Congress; President Clinton vetoed the measure.
"This proposal will not take one dollar from public education, as some imply," said Janet Parshall, national advocate for the Family Research Council in Washington, DC. "ESAs are simply a more efficient and effective way to make education a national priority," she added, because "ESAs are based on the idea that parents are the best judges of their children's educational needs."
Coverdell's ESA bill, already reintroduced in the Senate, would permit parents and other individuals to contribute up to $2,000 annually to a tax-exempt savings account. No tax would be assessed on withdrawals from the account to pay for expenses associated with K-12 education at public, private, religious, or home schools. Senator Robert Torricelli (D-New Jersey) co-sponsored the bill's reintroduction.
Though President Clinton opposes the tax-free savings accounts, they are popular with the public. Sixty percent of respondents to a 1998 Phi Delta Kappa poll favored ESAs, with support among parents of public school children rising to 78 percent.
Tax Credits Included
Coverdell's Education Savings Accounts bill also provides for two types of educational tax credits. Individuals who incur expenses for such items as tuition, tutoring, books, or special needs services would be eligible for a tax credit of $100 in 2000 and $250 after 2001. In addition, individuals who contribute to organizations that offer scholarships to low-income students would qualify for the tax credit.
In the House, Representatives James Rogan (R-California) and Tom Tancredo (R-Colorado) have introduced the Children's Education Tax Credit Act, HR 600, which allows individuals to qualify for a $1,000 tax credit against educational expenses.
For more information ...
The text of Coverdell’s ESA bill, S. 14, is available on the Internet at http://thomas.loc.gov/cgi_bin/query/D?c106:1:./temp/~c106ho2yzp::. The seven-page bill is also available through PolicyBot. Point your Web browser to http://www.heartland.org, click on the PolicyBot icon, and search for old document #2124606.