AAMC (Association of American Medical Colleges) President and CEO Darrell G. Kirch, MD, issued the following statement regarding provisions in H.R. 1, the “Tax Cuts and Jobs Act,” which was passed by the House Committee on Ways and Means:
“Provisions in the legislation passed by the House Ways and Means Committee would have a damaging impact on the nation’s medical schools and teaching hospitals, and on the patients we care for, the students and residents we teach and train, and the millions of Americans who gain hope from the research we conduct.
While we are not opposed to tax reform, there are several items which need to be addressed. Private Activity Bonds are a critical source of funding for our member institutions to secure financing of capital improvements, including new research and clinical facilities. Losing this resource, along with advance refunding bonds, will increase borrowing costs for medical schools and teaching hospitals, making it more expensive to build these vital facilities.
Endowments provide our member institutions with a stable and long-term source of funding that enables them to fulfill their missions. Imposing a tax on private college and university investment income would impede endowment growth, further straining institutions’ budgets and forcing our members to reduce future investment in student financial aid, research, and clinical care.
Also under the provisions of this bill, many medical students and trainees would face increased educational costs. In particular, the tax on tuition waivers for graduate students would undermine the research career pipeline at a time when Congress has identified the need to bolster the next generation of biomedical researchers. Additionally, the repeal of credits and deductions that make graduate and professional education more affordable would create a hardship for many students.
Among others, we also are concerned about provisions that would discourage charitable giving, which is a vital source of funding for our institutions, and those that would impose an excise tax on compensation for certain employees at tax-exempt organizations, which would limit resources that would otherwise support medical school and teaching hospital missions.
We urge House leadership to remove these provisions from any final tax reform package that comes to the floor.”
The Association of American Medical Colleges is a not-for-profit association dedicated to transforming health care through innovative medical education, cutting-edge patient care, and groundbreaking medical research. Its members are all 151 accredited U.S. and 17 accredited Canadian medical schools; nearly 400 major teaching hospitals and health systems, including 51 Department of Veterans Affairs medical centers; and more than 80 academic societies. Through these institutions and organizations, the AAMC serves the leaders of America’s medical schools and teaching hospitals and their more than 173,000 full-time faculty members, 89,000 medical students, 129,000 resident physicians, and more than 60,000 graduate students and postdoctoral researchers in the biomedical sciences.