WASHINGTON — U.S. Senator Tim Scott (R-S.C.) joined Senator Mike Lee (R-Utah) in introducing the Accelerating Children’s Education (ACE) Act to bolster educational choices for American families. This legislation builds upon a provision of the 2017 Tax Cuts and Jobs Act and enhances federal tax incentives for the enactment of state-level school choice legislation while addressing growing concerns among parents about the ideological influences in public education and the economic barriers to alternative schooling options.
“I’ve always championed educational freedom because of one simple truth – when parents have a choice, kids have a chance,” said Senator Scott. “I’m proud to continue fighting to ensure every child – no matter their zip code – has access to a school that best fits their needs and provides them the opportunity to live out their version of the American dream.”
“It is the fundamental right of parents to choose the educational path that is most suitable for their children,” said Senator Lee. “The ACE Act ensures that our tax system reflects this principle and provides real support to those seeking alternatives to public schooling.”
“Across the country, and especially in Southwest Missouri, school choice is already benefitting many of our nation’s young children.” said Rep. Burlison. “Through 529 education saving accounts, families are freed from the arbitrary link between where they live and which school their child can attend. School choice makes institutions of education more accountable and responsive to families. This leads to higher graduation rates and increases parental satisfaction and involvement while saving taxpayer dollars.”
Representative Eric Burlison (R-Mo.) introduced companion legislation in the House of Representatives.
Key provisions of the ACE Act include:
- Doubling the allowable level of tax-exempt 529 account distributions for qualified educational expenses to $20,000 per taxable year;
- Gift tax exclusions up to $20,000 per year for contributions to 529 accounts; and
- Adjusted federal tax exemption on municipal bonds based on state school choice laws, incentivizing states to adopt such measures.
Under the ACE Act, states with no qualifying school choice laws will see the tax-exempt status of municipal bonds for local projects, such as new school construction, revoked. States that adopt school choice laws will benefit from a 50% tax exemption on bond interest income, while states fully embracing school choice will enjoy a complete tax exemption.
Click here for full text of the bill.