Over on the homepage, John Schilling writes:
U.S. Secretary of Education Betsy DeVos has unveiled a proposal for Education Freedom Scholarships, with corresponding legislation introduced by Senator Ted Cruz and Representative Bradley Byrne. The plan would invest $5 billion annually in America’s students by allowing individuals and businesses to make contributions to in-state, non-profit Scholarship Granting Organizations (SGOs) that provide scholarships to students. Contributors would receive a non‐refundable, dollar‐for‐dollar federal tax credit in return for their donations. No contributor would be allowed a total tax benefit greater than the amount of their contribution, and not a single dollar would be taken away from public schools and the students who attend them.
This takes me back to 2011, when I ran NR’s now-defunct Phi Beta Cons blog and had a lengthy — and I mean lengthy — war of words with numerous fellow conservatives and libertarians (including some guy named David French, I wonder what ever happened to him) about this very idea.
I love school vouchers. I am not a fan of this tactic for sidestepping political and legal resistance to them.
You can read my most comprehensive fusilade against this concept here, but the problem boils down to this: If you’re giving someone a dollar-for-dollar tax credit for a “donation,” it’s not actually a donation. Anyone with, say, $500 in tax liability can “donate” $500 — and then knock the full $500 right off his tax bill. Not taxable income. Tax bill. This means that every dollar going to these programs is fully reimbursed by the government. You’re letting people funnel government dollars toward something you want to spend government dollars on but can’t pass on those terms.
Conservatives who contend this is different from funding vouchers directly — that it takes the government out of the equation in any meaningful way whatsoever, or that, as the Education Department’s website claims, it makes the scheme “voluntary” and “100% privately funded” — should ask themselves if it would violate the principles of the Hyde Amendment if liberals could get a dollar-for-dollar tax credit for funding abortions. No government money would be involved then either, right?
Going deeper into that vein, the government is collecting maybe $2 trillion per year in individual income taxes these days, plus another half-trillion from corporations. If even 10 percent of that comes from liberals who’d be willing to make similar “donations,” that’s a lot of “private” money they could shunt toward Green New Deal projects, or welfare for people “unwilling to work,” or what have you, if the next Democratic Congress sets up similar arrangements to enable “voluntary” support for its own politically difficult ideas.
There’s also a problem with saying the proposal “respects federalism” because states don’t have to set up these programs. That’s “federalist” the same way that Obamacare’s Medicaid expansion is federalist: States that opt in get an injection of money that other states don’t get, at the expense of a federal treasury that’s funded by taxpayers in all states whether they opt in or not. The truly federalist way to do this would be to let states choose between getting money for vouchers and getting a boost to their normal federal education funding.
If we want the government to subsidize school vouchers, let’s make that case to the public, get a bill to that effect on the president’s desk, and defend the resulting law in court when liberals whine about the involvement of private religious schools. Let’s not come up with elaborate shell games that allow individuals and businesses, especially those with lots of tax liability, to redirect federal money to the cause, and insist in the face of basic economics that it’s actually private money. This logic can backfire on us quite easily.