[Congressional Record (Bound Edition), Volume 147 (2001), Part 3]
[Senate]
[Pages 3455-3456]
[From the U.S. Government Publishing Office, www.gpo.gov]



                THE EDUCATION OPPORTUNITY TAX CREDIT ACT

  Mr. ALLEN. Mr. President, I rise today in support of the education 
opportunity tax credit on behalf of myself as well as Senators Warner, 
Craig, and Allard. This is a measure that was introduced last Thursday, 
March 8.
  What the education opportunity tax credit would do is increase the 
amount and the quality of available academic services and technology-
related resources for parents and for students.
  This measure does several very good things. No. 1, it increases 
education spending with greater parental involvement. No. 2, it is a 
tax cut for families. And, No. 3, it brings forth more funds available 
for technology and specialized tutoring-type teaching.
  I know the Presiding Officer and other Members of the Senate 
recognize how important education is for our children and for the 
future of our Nation. It is essential for our children's futures 
because the best jobs will go to those who are the best prepared. The 
education opportunity tax credit helps in that regard.
  In education, good quality classrooms and good teachers, able to 
impart knowledge to our children, are important. Academic standards and 
accountability and the measurement of those high academic standards in 
the basics of English, math, science, social studies, and economics are 
all important, but also as important as teachers and administrators in 
the education of our children are the parents; and parents need to be 
empowered. Their involvement is key for the academic success of their 
children.
  Indeed, parents know their children's names. They know the specific 
needs of their children much more than any bureaucracy in Washington, 
DC.
  Finally, children need to have computer skills to be able to compete 
and succeed in the future. Computers and wiring in schools and access 
to the Internet in schools and in libraries is a good idea and is very 
important. Community centers are important.
  Last week, the Republican Senate High-Tech Task Force visited an 
Intel clubhouse. It is working in conjunction with the Boys and Girls 
Club here in Washington, DC. There are many good ideas in these 
community centers, but we need to make sure there are computers and 
software programs and educational programs at home because homework is 
done at home and on weekends.
  This is what the education opportunity tax credit does. It provides 
families with a $1,000-per-child education opportunity tax credit. It 
is capped at $1,000 per year per child, and capped at $2,000 per year 
per family if they have more than one child. It defrays the cost of 
education-related expenses for computers and computer-related 
accessories and technology. Educational software, Internet access, and 
tutoring services could be expenditures that would thereby get the tax 
credit. It does not apply to private school tuition. And as introduced, 
it is refundable.
  This is a family-oriented education tax incentive that will have a 
very real impact on the ability of parents to better afford education-
related services and technology resources.
  This is the financial situation of a family with an income of 
$38,900. That is the median family income in the United States.
  After a family pays all the money in taxes to the Federal Government, 
the State Government, the local government, and after they pay for 
their housing, their clothing, their food, their medical care, and 
their transportation--these are all absolutely essential for the 
survival of a family--the real disposable income gets down to about 
$2,100.
  Now, educational expenses normally are going to be school supplies 
and a variety of other items that are important. But you realize, with 
that amount of money, if you bought a computer, purchased a used 
printer, software, and Internet access, that totals over $2,400. So the 
amount that would be added to credit card debt would be $241 a year.
  The reality is, once you pay your taxes to all levels of government, 
once you pay for food and clothing and housing and putting gas in the 
car, and a car payment, and all the rest, the average family has about 
$180 left a month for everything else. And the average cost of a 
computer is going to be about 70 percent of that.
  You can have the statistics, but real people in the real world, folks 
such as Jim and June Meadows, support this proposal because it would 
help them afford specialized software for their daughter Morgan, who 
has dyslexia, without sacrificing the education needs of their other 
daughter, Meghan, who is age 10.
  You do not have to go outside the beltway to find these working 
folks. In fact, right here in the Capitol you will find people who are 
working who recognize the value of this. In fact, Milton Salvadore, who 
I ran into in the Senate restaurant a few weeks ago, is such a working 
family man--he works, his wife works, and they have young children--I 
asked him: Do you all have a computer for your young school-aged 
children?
  He said: No. No.
  I said: Why not?
  He said: Look, we have all these bills, and so forth. My wife and I 
are working hard, but we do not have enough money for that. We do not 
want to go into debt to go get a computer and Internet access for our 
children. He said it would help him and his hard-working wife afford a 
computer for his family, if this education opportunity tax credit were 
in effect.
  The tax impact on the average family of three with an adjusted gross 
income of approximately $39,000 a year, if they took the full $1,000 
tax credit for their children's education expenses, that would save 
nearly 34 percent on their yearly Federal tax bill. A family of four 
with an income of $39,000 taking the full $2,000-per-family tax credit 
would realize a savings of 95 percent on their taxes owed for the year.
  If we are going to seriously address the digital divide--and the 
digital divide is a divide in opportunities--we must act to provide 
families and children with the financial means to take advantage of 
education opportunities. Closing the digital divide is important. The 
education opportunity tax credit provides the financial resources to 
achieve this goal by making the tax credit fully refundable so that 
lower income families who owe the Government less money than the 
maximum available tax credit--say they owe $700--or if they have no tax 
liability at all, would get the full credit. Everyone would be able to 
take full advantage of this opportunity.
  The digital divide is a function of many factors, including geography 
and educational levels of parents. Hence, the most salient and 
determinative factor is family income. According to numbers released in 
October of 2000 by the U.S. Department of Commerce--these figures are 
borne out by studies by Virginia Commonwealth University--we find that 
of the 92 percent of people who are computer owners, 29 percent have 
Internet access. So these figures do match in that regard with

[[Page 3456]]

Virginia. If we look at households with less than $15,000 in annual 
income, 12.7 percent of them have Internet access, which is pretty much 
equal to computer ownership. Families falling within the $15,000 to 
$24,000 per year range have a 21-percent rate of Internet access. 
Families with incomes of $75,000 per year or more have about a 77-
percent Internet access rate.
  These numbers show how this bill will help all people, but that the 
main value will be to those of middle income and lower middle income 
who will be able to purchase computers, Internet access, and 
educational computer software for their children. This is more than 
just a purely personalized education tax and parental involvement 
technology issue. This is about--the digital divide and making sure 
people are getting a good education and access to technology so they 
are literate and capable. It is vital to the future of the United 
States in a global economy. It is important for our domestic economy, 
and it is obviously important for individual families.
  In maintaining our economic growth, the Department of Commerce 
estimates that information technology industries accounted for 30 
percent of the country's total real economic growth between 1995 and 
1999. Between just 1997 and 1999, there were over 1.2 million new jobs. 
The average wage of technology jobs in the Nation was $58,000 compared 
to $32,000 in the overall economy.
  What we need to understand is, without a continued influx of 
qualified, competent workers, the growth in the technology industries 
will stall and Americans, if not properly educated, will not be able to 
seize the opportunities. Whether it is in the Silicon Valley of 
California, the silicon Dominion of Virginia, or whether it is in 
Idaho, Pennsylvania, Florida, Iowa, or anywhere else, it is important 
that our youngsters are getting a solid education.
  The number of U.S. college graduates with high-tech degrees in the 
country is declining. Since 1990, the number of high-tech degrees has 
dropped by 2 percent. Undergraduate degrees in math have declined by 21 
percent, computer science degrees have declined by 37 percent, and 
electrical engineering degrees by 45 percent. Although, this wasn't the 
trend we saw in Virginia in the 1990s. Actually, there was a big 
increase of jobs and degrees--Virginia having the third fastest growth 
in technology jobs--however there was the same income differential 
between technology-related jobs and other forms of employment. The 
studies from Virginia showed that the average technology job paid 
$66,000 a year versus $31,000 in the overall economy.
  As a country, unless we better prepare all students, they will not be 
able to meet the high-tech job demand; the number of innovations and 
new technology developments will decline, and businesses and jobs will 
move offshore.
  I say to my colleagues in the Senate, it is time for us to act to 
make sure we keep these well-paying jobs, these high-tech jobs, in 
America for Americans.
  There is broad-based support by Virginia voters for the education 
opportunity tax credit. This is not a conservative versus liberal, or 
Democrat versus Republican, or men versus women type issue; it is a 
commonsense, good for families, education spending and tax cut issue.
  What we found in Virginia with this idea--and it did get pretty well 
debated in the recent campaign--is that--and this was from polling--61 
percent of liberals liked the idea; 69 percent of conservatives liked 
it, and moderates actually liked it the best, 71 percent. Men liked it 
at over 70 percent. It was supported by nearly 70 percent of women. It 
didn't matter someone's race, where they lived, ideology or political 
persuasion, or if they were not involved in any organized political 
party. It was very strongly supported by everyone in Virginia.
  The people of Virginia recognize that it helps them with their own 
children. In fact, at the Flying J truckstop in Caroline County, I was 
going in to pay my bill, and the woman who was there taking my credit 
card said: I like your education tax credit.
  I said: That's great, ma'am. I am glad you know what is going on with 
this measure. Do you like it?
  She said: I am a tutor in Caroline County schools in mathematics.
  It is a county with many people who cannot afford a tutor, and she 
saw that those students who needed help in math and their families 
could better afford her or other tutoring services so they could get up 
to speed in mathematics with the support of this tax credit. This is an 
idea that is appreciated by people in Virginia. As we work to make sure 
our fellow Senators know about this idea, they will realize it is 
something on which we will need to have to take action very soon, to 
make sure our students have the highest quality and most appropriate 
education possible.
  We need to trust parents to be involved in their schools. They know 
their children's needs. They know their specific areas that will be of 
interest and what will best benefit them. Through this substantial tax 
benefit, all families will have access to a full spectrum of available 
education opportunities and related technologies.
  I hope my colleagues will look into this matter. The Education 
Opportunity Tax Credit Act will provide families with choice and 
opportunity. I look forward to working with my colleagues, Senator 
Warner of Virginia, Senator Craig of Idaho, and Senator Allard of 
Colorado, as well as other Members, in making sure that we ensure the 
passage of the education opportunity tax credit to empower parents, to 
increase education spending, and also to reduce taxes while providing 
more technology capabilities to the children of America.

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