Today, Allen Fagin, executive vice president of the Union of Orthodox Jewish Congregations of America, the nation’s largest Orthodox Jewish umbrella organization, testified before the U.S. Internal Revenue Service to express concern over proposed tax regulations that would undermine state-sponsored scholarship programs that enable thousands of students to attend Jewish day schools (as well as other nonpublic schools).
The proposed regulations are to implement the new limits to the deductibility of the State and Local Tax (SALT) payments contained in the new tax law Congress passed last year. The proposed regulations would provide that individual taxpayers who receive a state or local tax credit for contributing to state-supported scholarship programs would have to reduce any charitable deduction for that contribution on their federal taxes by the amount of the state tax credit. Such state-supported education tax credit programs exist in more than 15 states.
The proposed rules would particularly harm Jewish day schools and yeshivas in Pennsylvania and Florida, where 40 percent and 25 percent of Jewish day school students, respectively, receive tax credit scholarships worth more than $31 million combined. The Orthodox Union has been working together with other leading school choice organizations to press the IRS to modify the proposed regulations so they don’t harm existing tax credit programs.
Speaking before IRS and Treasury Department officials, OU Executive Vice President Allen Fagin described the cost of providing a Jewish education as the American Jewish community’s greatest challenge and offered alternatives to avoid the negative effect of the proposed regulations:
“The adverse impact of the proposed regulations on these programs will harm thousands of students that depend upon these scholarships and their families. The adverse impact is unnecessary and unwarranted,” Mr. Fagin stated.
He went on to propose specific changes to the proposed regulations.
Read Mr. Fagin’s testimony as prepared for delivery.