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1 Kyle Pomerleau, The Higher Education and Skills Obtainment Act: A Proposal to Reform Higher Education Tax Credits 1 (2013)

handle is hein.taxfoundation/ffdhhxz0001 and id is 1 raw text is: July 25, 2013 No. 377 The Higher Education and Skills Obtainment Act: A Proposal to Reform Higher Education Tax Credits By Kyle Pomerleau Introduction Senator Marco Rubio (R-FL) and Congressman Aaron Schock (R-JL) have recently introduced the Higher Education and Skills Obtainment Act, which would reform the current tax subsidies for higher education by eliminating the current assortment of education tax credits and deductions and consolidating them into one higher education credit called the Higher Education and Skills Obtainment Credit. This proposal reduces some complexity that exists in the current tax benefits for higher education, targets the credits for a narrower population of taxpayers, and saves taxpayers money. However, there are still problems with using the tax code to subsidize higher education. Tax credits for higher education are likely contributing to rising tuition costs while not making students any more likely to enroll in college. Although this reform is a step in the right direction towards a simpler tax code, there is still room for a conversation about whether the tax code is the right tool for making college more affordable. Higher Education Tax Benefits Lawmakers have increasingly used tax credits as a way to help students cover the cost of college. From 1998, the first year these credits were available, to 2010, the use and cost of these credits has greatly increased. Chart 1 shows the cost of higher education tax credits has grown from $4.5 billion in 1998 to more than $24 billion in 2010. With more than 24 million taxpayers claiming the credit, the average taxpayer claimed roughly $1,000 in education tax credits.1 1 Scott Hodge, Are Tax Credits the Proper Tool for Making Higher Education More Affordable?, Testimony before the U.S. Senate Committee on Finance, July 25, 2012, °°

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