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More on Tax-Credit Voucher Programs

Andrew J. Coulson has more thoughts about the difference between voucher programs and tax-credit programs that fund vouchers.

In the first section of the post, he further argues that there’s an important difference between (A) the government taking $1,000 in tax money and spending it on vouchers and (B) the government carving out a special exception to the tax laws that enables a private citizen to “donate” $1,000 and in return get a $1,000 discount off his tax bill. I think we’ll have to agree to disagree on this one.

In the second part, though, he makes the case that tax-credit voucher programs save money, because private schools educate children more efficiently than public schools do. I agree, and in fact I mentioned this when I explained why I support real, above-board voucher programs.

My argument against tax-credit programs has nothing to do with the total amount that the government collects in taxes. It has to do with the distribution of tax dollars — which should be determined by an honest and frank democratic process, even when that process results in laws I disagree with. If the public isn’t willing to allocate its tax money to vouchers, voucher supporters such as Coulson and I should work harder to convince them — and not rely on tricks such as tax-credit voucher programs, which, in my view, essentially allow politicians to rebrand government-funded voucher programs as “donations” by private entities, making them easier to pass.

When someone pays $1,000 less in taxes, redirecting that money to a particular area (K-12 education in this case) that’s $1,000 that won’t be divided amongst the entire budget. The government, in turn, directs a little less of everyone else’s money toward that area, and a little more of everyone else’s money toward everything else. It doesn’t matter whether there’s “intermixing” between the “donations” and the other tax receipts in a “pot” of money. In the end, the total outlays are exactly the same as they would have been had the government allocated the money to the special area itself — that is, had the government had the guts to pass a voucher program that directly gave government money to students to spend at private schools.

The only difference is political. By letting citizens do the government’s job of allocating tax money to the preferred area, politicians can avoid controversy, claiming they’re merely enabling “donations.”

New on Phi Beta Cons. . .


COMMENTS   1

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 Duke
   05/27/10 14:54

IMO, the political difference is even more fundamental to conservatives' hearts. In a straight voucher, the voucher costs are an expenditure, just like the town's school budget, and so there is one-to-one offset in town spending as voucher use increases. In the tax credit program, the voucher cost to towns is actually a loss on the revenue side. It's too complex for a town budget referendum to make the case that lower pulbic school spending is offset by vouchers eating into the town's income side. It will just look like gutting the public school budget. End result, if there's no will to cut the public school budget, each additional tax credit voucher will strain town finances more (with public schools getting a hidden excess due to fewer students). That flaw I think consigns tax credit vouchers to at best being a bit player in the grand scheme of education funding.

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