Tuition Tax Credits

Report Outline
Renewed Legislative Struggle
Public vs. Private Education
Government's Role in Education
Special Focus

Renewed Legislative Struggle

Timing for Vote Turns Unexpectedly Bad

With President Reagan's election last November, 1981 seemed to be the year Congress would pass a law enabling taxpayers to deduct some of the cost of sending their children to private schools. A tuition tax credit bill won House approval and picked up 41 votes in the Senate in 1978, and the 1980 elections, bringing a Republican majority to the Senate, improved the political climate for passage in the new Congress.

The Republican Party's 1980 platform championed tuition tax credits as “a matter of fairness, especially for low-income families, most of whom would be free for the first time to choose for their children those schools which best correspond to their own cultural and moral values.” And unlike President Carter who opposed tuition tax credits, President Reagan expressed his support for them. Sen. Bob Packwood, R-Ore., reintroducing a tuition tax credit bill he was cosponsoring for the third straight Congress with Sen. Daniel Patrick Moynihan, D-N.Y., said on Feb. 24: “With the wholehearted support of the Reagan administration, I expect the 97th Congress will see passage of this vital legislation.”

To become effective in August 1982, it would provide a refundable federal income tax credit for half of the tuition, up to $250, paid by a taxpayer, spouse or dependent at any private elementary, secondary or vocational school or college that had a tax-exempt status with the Internal Revenue Service. A year later the maximum credit would rise to $500, and in 1984 it would extend to graduate students and half-time enrollees in colleges and vocational schools.