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.