Senate Committee Approves Tax Plan Embraced by Higher Education - Thursday, May 8, 1986

Sep 28, 2026

Senate Finance Committee members unanimously approved a tax reform plan aligned with higher education priorities, after it had seemed to be faltering earlier. The proposal keeps key benefits for public higher education, including state and local tax deductions for itemizers, with exemptions such as state sales tax, and favorable treatment for municipal bonds plus fellowships and scholarships. The committee resisted making charitable contributions’ nonitemized deduction permanent, and the plan’s rate cuts may reduce high-income donations.

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Senate Committee Approves Tax Plan Embraced by Higher Education

Senate Committee Approves Tax Plan Embraced by Higher Education (Cont.)

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Vo1。14,No。89 Thursday,May 8,1986 # SENATE COMMITTEE APPROVES TAX PLAN EMBRACED BY HIGHER EDUCATION Completing a remarkable turnaround,the Senate Finance_Committee Tuesday nightunanimously approved a tax reform plan that only last Friday appeared to becrumbling under its own weight:a plan that higher education lobbyists seemwilling,if not eager,to live with. "By and large,the committee responded remarkably well on most of the major is-sues,"said Jerry Roschwalb,director of governmental relations for the Nation-al Association of State Universities and Land-Grant Colleges."There are stillsome questions left,and there are stil1 some things we would rather see,butwe are deeply appreciative of the attention given to our concerns and of theresults of that attention." The plan,which aides said will go to the Senate floor in about a month,wouldretain several provisions lobbyists said were crucial to the continued goodhealth of public higher education.Resurrected over the weekend by committeeChairman Bob Packwood,R-Ore.,the committee's tax package would retain foritemizers all state and local tax deductions except for state sales tax.Theplan also would retain favorable treatment for municipal bonds,fellowships andscholarships(HED,May 7)。 Some ConcessionsAl1 did not go higher education's way,however,as thecommittee resisted 1obbyists'requests to make permanent the nonitemized de-duction for charitable contributions,which is set to expire at the end of thisyear and for which higher education advocates had lobbied hard. Independent Sector,a consortium that includes philanthropic foundations,prom-ised to push for such an amendment on the Senate floor,perhaps with a $100floor as in H.R。3838,the tax plan approved in December by the House(HED,Dec.19,1985)。 Lobbyists say the Senate's plan,which would cut some taxpayers'rates by near-ly half,would encourage fewer donations to colleges and universities than cur-rent law does.By cutting high-income individuals'tax rates from 50 percentto 27 percent,the plan would discourage donations by devaluing the deductionsfor them。 "With that cut,we anticipace a loss in individual gifts to higher education inthe neighborhood of 30 [percent]to 35 percent,"said Sheldon Steinbach,gener-al counsel of the American Council on Education."There's a major crunch com-ing in terms of loss of the nonitemizer deduction and the 1owering of rates,"he said.(more) # SENATE COMMITTEE APPROVES TAX PLAN EMBRACED BY HIGHER EDUCATION(Cont.) During the hiatus until the full Senate considers the bil1,the National Coali-tion Against Double Taxation will try to gather support for restoring the item-ized deduction for state and local sales taxes.Roschwalb,however,was waryof asking too much of legislators."We may have to ride out the judgment ofthe committee,"he said."You have to recognize what Moynihan and Durenbergerhave done for us already.You can only push people so far." But a drawback to the Senate plan is that it would limit the amount public re-tirees may draw tax-free from their pensions,noted Gregory Humphrey,directorof legislation for the American Federation of Teachers.Whereas the tax-freecap now is one third of the individual's total pension,the Senate plan by 1989would drop that cap to the.amount reached by dividing the total pension by thenumber of years the retiree is expected to live.--Maggie Hume # NEH JEFFERSON SCHOLAR CALLS FOR UNIVERSAL MORAL STANDARDS Modern society's failure to embrace the“absolute values"of good and evilthreatens the continued survival of civilization,according to the noted Polishscholar Leszek Kolakowski. "To sneer at absolute values has been extremely easy,"since we have convincedourselves that“all human beliefs about good and evil are culture-bound andhistorically relative,"according to Kolakowski,who was to deliver the 15thannual Jefferson lecture in the humanities last night.The lecture,whichcarries a $10,000 stipend,is sponsored by the National Endow

FAQs

What did the Senate Finance Committee approve regarding the tax plan?

The Senate Finance Committee unanimously approved a tax reform plan that higher education lobbyists were willing to support, keeping several provisions seen as crucial for public higher education.

Which deductions and benefits does the plan keep for itemizers?

The plan retains state and local tax deductions for itemizers except for state sales tax, and it also keeps favorable treatment for municipal bonds, fellowships, and scholarships.

Why might the plan reduce donations to colleges and universities?

The planned rate cuts would discourage giving by devaluing deductions for high-income taxpayers, with expectations of a loss in individual gifts to higher education.

Sep 28, 2026

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