The Book of Ron Paul
1997 Ron Paul Chapter 95

Education Savings Act For Public And Private Schools

23 October 1997

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Congressional Record (Page H9065)   Cached

1997 Ron Paul 95:1
Mr. PAUL. Mr. Speaker, I appreciate the opportunity to explain why I oppose the Education Savings Act for Public and Private Schools—H.R. 2646—despite having been an original cosponsor of the Parents and Student Savings Account Act—PLUS A+—bill and having been quite active in seeking support for the original bill. I remain a strong supporter of education IRA’s, which are a good first step toward restoring parental control of education by ensuring parents can devote more of their resources to their children’s education. However, this bill also raises taxes on businesses and I cannot vote for a bill that raises taxes, no matter what other salutary provisions are in the legislation.

1997 Ron Paul 95:2
I certainly support the provisions allowing parents to contribute up to $2,500 a year to education savings accounts without having to pay taxes on the interest earned by that account. This provision expands parental control of education, the key to true education reform as well as one of the hallmarks of a free society. Today the right of parents to educate their children as they see fit is increasingly eroded by the excessive tax burden imposed on America’s families by Congress. Congress then rubs salt in the wounds of America’s hardworking, taxpaying parents by using their tax dollars to fund an unconstitutional education bureaucracy that all too often uses its illegitimate authority over education to undermine the values of these same parents.

1997 Ron Paul 95:3
In fact, one of my objections to this bill is that it does not go nearly far enough in returning education authority to the parents. This is largely because the deposit to an education IRA must consist of after-tax dollars. Mr. Speaker, education IRA’s would be so much more beneficial if parents could make their deposits with pretax dollars. Furthermore, allowing contributions to be made from pretax dollars would provide a greater incentive for citizens to contribute to education IRA’s for other underprivileged children.

1997 Ron Paul 95:4
Furthermore, education IRA’s are not the most effective means of returning education resources to the American people. A much more effective way of promoting parental choice in education is through education tax credits, such as those contained in H.R. 1816, the Family Education Freedom Act, which provides a tax credit of up to $3,000 for elementary and secondary expenses incurred in educating a child at private, parochial, or home schools. Tax credits allow parents to get back the money they spent on education, in fact, large tax credits will remove large numbers of families from the tax roles.

1997 Ron Paul 95:5
I would still support this bill as a good first— albeit small—step toward restoring parental control of education if it did not offset the so-called cost to Government—revenue loss—by alterning the rules by which businesses are taxed on employee vacation benefits. While I support efforts to ensure that tax cuts do not increase the budget deficit, the offset should come from cuts in wasteful, unconstitutional Government programs, such as foreign aid and corporate welfare. Congress should give serious consideration to cutting unconstitutional programs such as Goals 2000 which run roughshod over the rights of parents to control their children’s education, as a means of offsetting the revenue loss to the Treasury from this bill. A less than 3-percent cut in the NEA budget would provide more funds than needed for this return of tax dollars to families who seek choice in their children’s educational needs.

1997 Ron Paul 95:6
Mr. Speaker, we in Congress have no moral nor scientific means by which to determine which Americans are most deserving of tax cuts. Yet, this is precisely what Congress does when it raises taxes on some Americans to offset tax cuts for others. Rather than selecting some arbitrary means of choosing which Americans are more deserving of tax cuts, Congress should cut taxes for all Americans.

1997 Ron Paul 95:7
Moreover, becasue we have no practical way of knowing how many Americans will take advantage of the education IRA’s relative to those who will have their taxes raised by the offset in this bill, it is quite possible that H.R. 2646 is actually a backdoor tax increase. In fact, the Joint Committee on Taxation has estimated that this legislation will increase revenues to the Treasury by $1.8 billion over the next 2 years.

1997 Ron Paul 95:8
It is a well-established fact that any increase in taxes on small businesses discourages job creation and, thus, increases unemployment. It is hard too see how discouraging job creation by raising taxes is consistent with the stated goal of H.R. 2646—helping America’s families.

1997 Ron Paul 95:9
Mr. Speaker, I would suggest that is this type of legislation—a backdoor tax increase masquerading as a tax cut—that is, in part, responsible for the widespread and ever growing disgust with this body.

1997 Ron Paul 95:10
In conclusion, although the Education Savings Act for Public and Private Schools does take a small step toward restoring parental control of education, it also raises job-destroying taxes on business. Therefore, I cannot in good conscience support this bill. I urge my colleagues to join me in opposing this bill and instead support legislation that returns education resources to American parents by returning to them moneys saved by deep cuts in the Federal bureaucracy, nor by raising taxes on other Americans.


1997 Ron Paul Chapter 95
The text of this chapter was inserted in Congressional Record as an extension of remarks, and was not spoken on the House floor.

1997 Ron Paul 95:4
tax roles probably should be tax rolls.

1997 Ron Paul 95:5
alterning probably should be altering.

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