Re: Tax-Credit Voucher Programs

by Robert VerBruggen

I’d rather not run the topic into the ground (assuming I haven’t already, which is a big assumption), so I’ll just offer a few quick responses to David’s post.

First of all, if you donate $500 and get a $500 tax credit, the government is indeed “out” $500. Now, it’s also true that if you donate $500 and get a tax deduction worth $100, the government is out $100. But the truth of the latter statement does not detract from the truth of the first — the fact that the government might have partially funded school choice without these programs doesn’t change the fact that the government is fully funding school choice with them.

Also, when I say the government is “out” money, I mean that it has allocated money to one purpose (say, private schools) that it might have used for another (say, public schools) — not that the alternative use would have been a better investment. As I’ve said repeatedly, I happen to agree that school choice is a great investment.

What’s at issue is whether these programs direct public money to private schools without the people’s consent. My argument is that yes, they do: They allow school-choice supporters to take their tax dollars out of the general fund and funnel them into school choice — and they enable politicians to claim that these aren’t tax dollars at all, but rather “donations.” No matter that the only way the “donors” managed to keep that money in order to “donate” it was to pledge it to private schools.

I can’t wait, however, until Democrats catch on to the beauty of this approach. Would it violate the principles of the Hyde Amendment if the government set up a dollar-for-dollar tax credit for donations to abortion clinics? Hey, the money never entered the government’s coffers, so whatever, right?

UDPATE: I just wanted respond to the assertion that my position means that “all the money belongs to the government except to the extent that it deigns to allow private people to keep some of it.” First of all, given that the government has the power to set whatever level of taxation it pleases, I don’t quite see why that’s an argument against my position, as opposed to an accurate statement about an unfortunate reality.

But more to the point, while money that’s left over after you pay your taxes is certainly yours, these “donations” aren’t even made with that money. The “donors” do not have the option of keeping the money for themselves or spending it on something else; they can only give it to the government as taxes, or “donate” it to the school-voucher programs the government has approved. Once the government has taken it upon itself to decide exactly where money can be spent, that money is government money.