President Donald Trump signed a long-awaited piece of legislation on December 22, 2017: The Tax Cuts and Jobs Act. The bill introduces massive tax cuts for businesses and all Americans in the hopes of expanding and improving the economy. Such significant legislation raises the question: how will Deerfield be impacted?

Deerfield Academy’s Chief Financial Officer Keith Finan said that, when considering the Act’s consequences, “we actually dodged a lot of bullets.” To fund lost tax revenue, legislators made an unprecedented decision to introduce a 1.4% excise tax on the endowment of private institutions with over 500 students and assets valued at least $500,000 per student. Mr. Finan explained how the actual law does not include private high schools like Deerfield, exempting us from the tax.

For now, the Academy is in a comfortable financial position, but Mr. Finan warned that “next year there will be revisions,” meaning Deerfield could experience changes that would negatively impact the Academy. For example, Mr. Finan specifically noted that he “would be shocked if they didn’t expand the [endowment excise tax] to private schools,” leading Deerfield to pay millions of dollars in taxes rather than investing in the Academy.

However, one possible benefit of the bill is the revision to how parents can use their 529 Savings Plan, a savings account where tax-free earning can be reserved to eventually pay for college tuition. Now, the bill allows money from the account to also be used to pay for private high schools, like Deerfield.

U.S. government legislation, even once passed, typically sees revisions in years after. If these revisions do end up taxing Deerfield’s endowment, providing employee benefits would become more expensive. Thus, the bill could put the Academy in a position where it would have to spend more. These consequences could call for drastic changes in how Deerfield pays teachers and funds various programs such as athletics, school facilities, and academic clubs. However, it is still too early to determine exactly how the bill will impact the Academy; in years to come, we could remain completely unscathed or see massive changes to the school’s budget.