TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Sunday, December 3, 2017

Senate GOP Tax Bill Excludes House Provision Extending 529 College Savings Plans To Include 'Unborn Children'

Following up on my article, When Does Life Begin for Tax Purposes?, 68 Tax Notes 320 (1995):

Quartz, 'Unborn Child':  With Two Words, the Tax Bill Quietly Threatens Abortion Rights:

Hidden among the tax cuts [in the House GOP tax bill] ... is a short passage that could threaten women’s reproductive rights.

The bill lists “unborn children” among the allowed beneficiaries of 529 plans for college savings, breaking down the legal definition of an “unborn child” as follows:

Nothing shall prevent an unborn child from being treated as a designated beneficiary or an individual under this section. The term ‘unborn child’ means a child in utero. The term ‘child in utero’ means a member of the species homo sapiens, at any stage of development, who is carried in the womb.


New York Times, Tax Overhaul Bears Gifts for Conservatives, Including Rights for 'Unborn':

The language is contained in an innocuous provision related to education savings vehicles — so-called 529 plans, which are state-sponsored, tax-free investment funds that allow families to put aside money for a child’s college education. The provision explicitly allows expectant parents to designate a “child in utero” as a beneficiary of a 529 plan.

Parents have long been able to set up 529 accounts for an unborn child, but the provision accomplishes what anti-abortion activists have long sought: It enshrines into federal law the recognition of the unborn.

“An unborn child means a child in utero,” the provision states. “A child in utero means a member of the species Homo sapiens, at any stage of development, who is carried in the womb.”

Marjorie Dannenfelser, the president of the Susan B. Anthony List, which opposes abortion rights, said the addition of the words “unborn child” was a major victory for their movement.

“It is fantastic because the unborn child is appropriately represented in the tax code,” she said. “All of these things represent a serious commitment to treating the unborn child, as she or he should be, equal and protected in the eyes of the law.”

PolitiFact, The House Tax Bill Contains Language About Unborn Children, but Is It an Attempt to Ban Abortion?:

[R]eaders who clicked on the Milwaukee Journal Sentinel’s home page were confronted by a large pop-up ad attacking U.S. House Speaker Paul Ryan that linked a Republican tax reform proposal to abortion:

NARAL Ryan ad

The ad was from NARAL Pro-Choice America, formerly the National Abortion and Reproductive Rights Action League. If you clicked on an image at the bottom that said "Call Rep. Ryan Now," a link sent you to a page with more information. That page contained a statement that began with this:

House Republicans are quickly moving to pass a tax bill with divisive conception language by disguising it as a college savings plan. This is another attempt to ban abortion and rob women of their reproductive rights. Leading the charge has been House Speaker Paul Ryan. ...

Asked to respond to NARAL’s ad, Ryan’s office referred us to a statement about the provision issued by House Majority Leader Kevin McCarthy, R-Calif. The statement says in part:

Today, our tax code doesn’t recognize children with eyes, ears, noses, arms, legs, fingers, and heartbeats as children just because they haven’t yet left the womb …. So our tax plan adds clear language that allows parents to start a college savings account before their son or daughter is born by explicitly and unambiguously declaring these sons and daughters "unborn children."

The provision would not ... ban or even restrict abortion rights — although advocates fear that inserting unborn children language into federal law could be used to erode abortion rights in the future. NARAL’s statement is partially accurate, but leaves out important details — our definition of Half True.

Life Site, U.S. Senate Passes Major Tax Reform, Excludes Unborn:

In a late night nailbiter, [the] United States Senate voted 51 to 49 to approve the $1.5 trillion tax relief bill. ... 

While a major victory for Capitol Hill Republicans, the celebratory mood of pro-life America was dampened by the eleventh hour omission of two groundbreaking amendments from the final bill.

First, the Rubio-Lee Amendment, aimed at helping lower income families benefit more fully from the increased Child Tax Credit, garnered only 29 ‘Yes’ votes, falling far short of the 60 required for passage.  Thirty Republicans voted against the measure, while 9 Democrats supported it.

Second, Senate procedural hurdles required the removal of the unborn from the 529 education savings accounts and also prevented Alaska Senator Steve Daines from offering his much anticipated amendment which would have included the unborn in the Child Tax Credit (CTC). ...

In the run up to the crucial Senate vote, Family Research Council President Tony Perkins said allowing parents to receive a Child Tax Credit for their unborn babies would be “a huge pro-life and pro-family win” and predicted it would “help individual families and the economy by helping parents better handle the new costs of raising their children.”

Author of the innovative amendment, pro-life Montana Senator Daines told EWTN, “What this means long term is if we talk about, perhaps, overturning Roe v Wade someday, it gives us that much more strength in terms of a law that says what that woman is carrying is a life, and that could have some significant implications long term.”

“By including unborn children to qualify for the Child Tax Credit,” said Susan B. Anthony List president Marjorie Dannenfelser before the crucial vote. “Congress would achieve a significant pro-life win for families preparing for their baby’s birth.”

The Hill, Sentate Tax Bill leaves Out 'Unborn Child' Provision

Tax, Tax Policy in the Trump Administration | Permalink


This was taken out because it was "Byrdable", namely that it would have been subject to a point of order under the Congressional Budget Act. This is a consequence of the decision by Republicans to legislate via reconciliation rather than following the usual process for legislation. (Of course if the Republicans had followed regular order, then they would have had to work out a bipartisan agreement and the tax bill would look much different.)

Posted by: Victor Thuronyi | Dec 4, 2017 3:58:27 AM

Yikes, Victor! Where in the world did the Republicans ever get the idea to legislate this way?

Posted by: Mike Petrik | Dec 4, 2017 12:06:04 PM