|a division of Home School Legal Defense Association||March 27, 2000|
Education Savings Accounts Battle in the House
Education Savings Accounts (ESAsH.R.7) have already passed in the U.S. Senate and now face a tough battle in the U.S. House. Currently, the vote count is very close and your calls may be the extra pressure that will convince the last few congressman to vote yes.HSLDAs Congressional Action Program will be lobbying Congress on H.R.7 in Washington, DC on Wednesday, March 29, and attending an ESAs press conference at noon. Your calls coupled with these visits will have an important effect on the outcome of the final vote.
Please Call your Congressman on Tuesday, March 28 and Wednesday, March 29, and give him the following message:
Please support H.R. 7, the Education Savings Accounts Bill, sponsored by Congressman Kenny Hulshof and Congressman Lipinski. Education Savings Accounts will give my family and thousands of other American families a greater opportunity to invest in our childrens education free from further federal taxation.
To contact your U.S. House Representative, call the Congressional Switchboard number at 202.224.3121.
HSLDA strongly supports the education savings accounts proposal because it encourages parents to plan and save for their childrens education and provides needed tax relief to parents.
The concept of Education Savings Accounts is similar to the popular Roth IRA: The government creates a tax incentive for parents to save for their childrens K-12 education. Like the Roth IRA, contributions are not tax deductible but the interest accumulates tax-free.
Under H.R.7, parents or other individuals may contribute up to a total of $2000 to a trust fund for a child. For example, a parent could contribute $500, a grandparent could contribute $1000, and a local business could contribute $500 (total of $2000) to the same account in one year. The money could then be invested through any combination of investments (mutual funds, stocks, bonds, etc.).
Though the parents, grandparents, or business are unable to deduct the original contribution to the education savings account from their taxes, all accumulated interest on the account is not taxed. This tax savings plan will benefit home school parents who want to save for their childrens future education. However, money withdrawn from the account may only be used for qualified expenditures for public, private, or home school education.
Such qualified expenditures for home schools include tutoring fees, special needs services, books, supplies, computer equipment and related software, and services.
Education savings accounts would give parents and concerned citizens a new way to invest in childrens education from kindergarten through 12th grade. This incentive to save would benefit all studentspublic, private, home schoolersby providing the resources children need to excel academically and encouraging parents and other interested adults to participate directly in each childs education.