Educational Tax Credits to help states ride the budget storm

Even during the economic downturn, tax credits are a big cost-savings for Arizona. From the East Valley Tribune:

These tax credits do not “cost Arizona money,” as some would say. They actually reduce costs for Arizona’s government.

How? When your tax dollars go from your bank account, to a school of your choosing (as is the case with the “extra-curricular tax credit“), the state doesn’t have to pay the expense of “administering” and dispersing that money. In other words, when your money goes directly from you, to the school, the “middle man” at the state Capitol is eliminated, and there is less expense entailed in “managing” the money.

Similarly, when your tax dollars go into the “tuition tax credit” program, your money helps a kid in a failing public school to get out of that public school, and into a private school.

Obviously, when the number of kids in public schools is reduced, Arizona’s costs for public education is reduced as well.

Adam B. Schaeffer, Ph.D argues for introducing tax credits in Virginia in the Suffolk New Herald:

Americans feel strongly that we owe all children a decent education and a fair shot at succeeding in life. However, that’s not what millions of children are getting. So how can we give children the one gift that we truly owe them?

To make our educational intentions and hopes a reality, we need a dollar-for-dollar school tax credit for middle-class parents along with scholarships funded by donation tax credits for low-income families.

Education tax credits reduce the amount a taxpayer owes the government for each dollar he spends on his own child’s education or on scholarships for children who need them. That money comes straight off anyone’s tax liability, so it’s essentially found money; you can either pay it to the government or use it for the kind of education you want to support. For instance, if you or a corporation owe the state $1,000 and donate $1,000 to a scholarship-granting organization, you would pay nothing in taxes. The same kind of benefits can be applied to individuals for their donations, or for money they spend on their own child’s education. Tax credits for donations to scholarship organizations help support school choice for lower-income families, and personal-use credits help middle-class families.

National Review editorialists Cesar V. Conda calls for federal tax credits as well:

The current tax code includes preferential treatment for investments in physical capital, such as plant and equipment spending, but not for investments in human capital, such as education — even though both forms of investment contribute to productivity and economic growth. Under a universal education tax-deduction plan, taxpayers would be allowed an unlimited above-the-line deduction for certain qualified tuition and related expenses incurred by students attending primary, secondary, and post-secondary institutions, and for certain expenses related to home schooling and tutoring. To ensure that low-income families also benefit from such a tax plan, a refundable tax-credit component could be added.

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One response to “Educational Tax Credits to help states ride the budget storm

  1. I am a republican who voted for Jim Rex. I am absolutely opposed to school choice and think it will destroy our public schools. Public schools need money. Private schools are already inhabitated by rich kids who would not otherwise go to public school with or without a tax credit. Taking money out of public schools is recipe for disaster. Our schools need more money and less regulating. The wasted spending is taking place at the top, not in the classrooms where teachers are spending their own money to get necessary supplies for school. In addition, their creativity is being stifled by all the micromanaging being done on the part of the government. The government needs to fund education and get out of the classrooms and let the professionals they hired, the teachers, do the teaching without being boxed into certain standards that keep them from being the best teachers they can be. I bet everyone reading this has had a particularly wonderful teacher at some point in his or her life, and that teacher most certainly did not follow a standard forced on him or her by the government but taught in a manner that best suited his or her talents. That’s what makes a great teacher. The government is keeping our great teachers from being great. They are micromanaging them to the point they can hardly teach. Take the money from the government micromanaging programs and give it to the teachers. School Choice is NOT the answer. It will be the ruin of public schools. All the best teachers out there will jump ship and run, and where will our kids be? Republicans against School Choice!!!! That’s me and many others who value our public schools. Our governor has made it clear he does not. He has no respect for what public school teachers do or he would have sent his own kids to public school.

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