We do not subscribe to the view that there will be wholesale grade inflation if this proposal were signed into law. However, to the extent that students may adjust their academic program or schedule of classes to remain eligible for this tax credit, the credit would distort the academic decisions of those students who need, financially, to claim this credit. The B average requirement also raises equity issues. According to U.S. Department of Education data, academic performance by race and ethnicity varies significantly. To be eligible to claim this deduction, students must be enrolled on at least a half-time basis, unless they are taking a course to obtain or improve job skills.
Education is an investment in the future of our children and our nation.
The Administration proposal would also reinstate the exclusion for graduate-level courses, and apply a new tax credit to encourage small businesses to provide educational assistance to their employees. We believe this legislation should be a high priority for this committee. These two problems directly counteract an intended effect of section 127, namely, to encourage additional training for our workforce. It is also important to bear in mind that this is a private sector program. Employers establish the program.