Regarding the question in this particular Supreme Court case — do tax-credit voucher programs violate the Establishment Clause of the First Amendment? — we’re in agreement. As David pointed out here earlier, the Supreme Court has held (correctly, in my view) that it’s fine for the government to provide vouchers for private schools, even religious schools, so long as the vouchers aren’t restricted to religious schools. I can think of no reason that this would be okay, but a tax-credit program that similarly included but was not restricted to religious schools would not be.
But I think his broader defense of using tax credits to fund voucher programs is misguided:
Credits are not just constitutional, they offer an important advantage over vouchers. Under voucher programs, all taxpayers must support every kind of schooling, which can be a source of social conflict in a diverse society. [Think liberals being forced to fund religious-conservative-capitalist schooling; or conservatives being forced to fund schools supporting homosexuality as natural and without any inherent moral implications]. While this doesn’t violate the U.S. constitution (see Zelman v. Simmons Harris), it’s still a less-than-ideal outcome, as was observed in all three dissents in the Zelman case.
I don’t see how a switch from vouchers to tax credits does anything whatsoever to change this, at least mathematically speaking. Whenever someone earmarks their tax dollars for a certain purpose — in this case, by “donating” to a voucher program and being reimbursed with a tax credit — the government has to devote a higher share of everyone else’s tax dollars to the rest of the budget. Non-“donating” taxpayers, therefore, subsidize the voucher program to the exact same degree they would have if the government funded it directly.
(One could make a similar argument about tax-deductible charitable donations. I’d agree with that argument, but I should note it’s a much smaller problem, on a per-dollar-donated basis at least, thanks to the difference between a credit and a deduction.)
The voucher-to-credit switch seems to be highly beneficial politically — thus the success of these programs. So maybe there’s something to Coulson’s argument about avoiding social conflict, if only because people mistakenly think there’s a meaningful difference between the two funding mechanisms. And as I said before, there’s a logic to the idea that by keeping the money out of the government’s hands, this method keeps the money from becoming “public funds” in a technical, legal sense. But that doesn’t mean that this switch has any practical effect on who’s funding what whatsoever.
Once again, I completely support vouchers. Private schools provide similar-quality education at lower cost, give families choice, reduce the role of government, and (as Rick Hess has argued regarding charter schools) create the conditions in which educational innovation can take place. We should be convincing the public of these benefits instead of tricking them with shell games like tax-credit voucher programs.