Opinion: Another faulty argument against school choice

I have written before about the special fervor with which school-choice opponents attack tax-credit scholarships in Georgia and other states. The latest example is a “study” by the national lobbying arm of school superintendents.

School-choice opponents are taking their tired arguments against tax-credit scholarships to Washington now.

The operative word here is “lobbying.” The School Superintendents Association does not want Congress to enact its own tax-credit scholarship, as proposed by Sen. Marco Rubio, R-Florida, and Rep. Todd Rokita, R-Indiana. So it portrays these scholarships as a “School Voucher Tax Shelter” for wealthy taxpayers.

Is this true? Suffice it to say, if this is the best “tax shelter” your accountant can find, you need a new accountant.

First, here’s how these scholarship donations work. In Georgia and several other states, donors receive a dollar-for-dollar state tax credit for these gifts and can claim them on their federal taxes as charitable contributions. But that claim is offset by a corresponding decrease in state taxes paid, which are also deductible, making it a wash for their federal tax liability. No “profit” there.

The same is not true for those subject to the alternative minimum tax, or AMT. To understand why it’s disingenuous to say these taxpayers are “profiting,” let’s review how AMT payers are treated differently.

Start with the fact the AMT exists to raise taxes on some Americans. These Americans typically qualify for more tax deductions than others with similar incomes; the AMT raises their taxes by taking away some of those deductions.

This is curious because, generally speaking, the reason Congress creates tax deductions is to encourage people to do certain things. You might think someone who qualifies for a lot of deductions by doing a lot of those things would get some kind of bonus tax break, or maybe a medal — not a tax hike. But that’s Congress for you.

So we are talking about people who pay more taxes, thousands of dollars more in some cases, than others with the same income, because they did too many of the things Congress encouraged them to do. But as Congress isn’t completely cold-hearted, it allows them to keep some deductions. That includes the one for charitable donations, but not the one for state or local taxes paid.

Enter the tax-credit scholarships. Donors to these programs can deduct them as charitable contributions, without realizing an offsetting increase in their taxable income. But that’s because they don’t get the deduction for state and local taxes. And because the vast majority of AMT payers will still owe some state or local tax, which they still can’t deduct, they’ll still pay more than a similarly situated non-AMT payer.

This “profit” of which the “study” speaks, then, is akin to Congress saying it is “cutting spending” when in reality it’s just increasing spending more slowly than before. It’s best understood as a reduction in the penalty the AMT imposes. And there is a price for this reduction: The donations must be made more than a year before the taxpayer can claim the state credit or federal deduction. Their money is tied up, unavailable for other uses, that entire time. Some “profit.”

But wait: This “loophole” is not only for tax-credit scholarships. It applies to any charitable contribution for which there’s a state tax credit or deduction.

Here you might ask: Didn’t the “study” say this was about “School Voucher Tax Shelters?” Yes, it did — presumably because “Broad Federal Tax Treatment of State Tax Credits, Not Just the One We Hate” isn’t as catchy.

Then there are the recommendations of the “study.” Such a “profit” could come from any state charitable tax credit, but the proposal is for Congress to single out tax-credit scholarships as ineligible for a federal deduction. The feds’ treatment of state tax credits is general, but the “solution” should be specific? Of course. Because, rich people! Private schools! Tax shelters! Profit!

The “study” is no better at connecting the credits to school budgets. It relies on the familiar argument that an additional dollar of tax revenue could, in theory, perhaps, go to public schools, but offers zero evidence for its assertion the credits are “draining funding for public schools.”

Maybe the superintendents hope you’ll take that one on faith. Based on the rest of the “study,” your faith would be badly misplaced.

Reader Comments 0

181 comments
Ralph-43
Ralph-43

Kyle - you are so wrapped up in dollars that you have entirely missed the DeVos attempt to destroy public education by diverting money (any way possible) to private education.  The goal here is to create an education system that requires 'application' and allows 'rejection'.  This is obviously all part of the Trump-Bannon-Sessions-Kushner 'White Power Movement'.  Most of us understand that and attempting to hide that in obscure tax document baloney makes those attempting look like the Public Education system failed them as well.   

JohnnyReb
JohnnyReb

@Ralph-43

White power, huh?

You got a problem.

The only racism is all that white power degradation coming from the Left.

AndyManUSA#45
AndyManUSA#45

And just like that, I am proud to be a Republican again. Look at our candidate in Montana, destined to fall to defeat because of his association to our President, he picks a reporter up by the head and slams him to the ground, an act that most Americans very much approve of and would like to do themselves, and he snatches victory from the jaws of defeat.


Are you paying attention, Karen?

JohnnyReb
JohnnyReb

@AndyManUSA#45

As I posted below yesterday, media was portraying the guy as a loser.

That shows how out of touch is media.

I'm thinking most on the Right want to pin a medal on him.

SGTGrit
SGTGrit

@Visual_Cortex  Well the insurance companies don't seem to agree and I'm sure Americans paying through the nose for worthless health insurance don't agree either.

TheCentrist
TheCentrist

Per most all polls, including right wing polling outfits, 83% say GOPcare is "mostly a horrible thing."

oldpunk
oldpunk

Hey Kyle - you do know the difference between a tax credit and a tax deduction, right?

SGTGrit
SGTGrit

Mark, breckenridge, Hedley, eyesore are examples of the far-left unAmerican scum we're dealing with in America.

Ychromosome
Ychromosome

So, according to this oped, credits are to promote doing the things the government wants you to do. Why does the government want to (or need to) financially "encourage" private schools? Is the ultimate goal is to do away with public education or, perhaps, keep a struggling remnant of the system that made America great?  Wouldn't public education benefit from having the more affluent students attend and have their, presumably, supportive parents involved? 

JohnnyReb
JohnnyReb

@Ychromosome

If things worked the way you envision it would be great, but they do not.

We have suffered a dumbing down of our educational system due to accommodation.

Parents pay school taxes they do not use due to putting their kids in private schools.

The list goes on.

Visual_Cortex
Visual_Cortex

@Ychromosome

1. They can't make it on their own without mooching. Also, the kids' parents have bass boats that need upgrading.

2. Yes

3. Yes

breckenridge
breckenridge

May 25 - A small Christian school under fire recently for banning pregnant senior Maddi Runkles, a 4.0 student, from walking at graduation is not backing down. In a letter to parents Tuesday evening, the school's principal said Runkles is being banned not because she is pregnant but "because she was immoral...The best way to love her right now is to hold her accountable for her morality that began this situation.”


But compared to the immoral piece of crap Donald Trump, and stupid loser Religious Right maggots that turned out in droves to vote for him, she's a paragon of virtue.

JohnnyReb
JohnnyReb

In another display of judicial ignorance, the 4th Circuit upheld the ban against Trump's travel ban.

Instead of basing their decision on the text of the EO, they instead based the decision on rhetoric from the campaign ignoring that the ban allows travel from several majority Muslim countries and that the banned countries were originally picked by the Obama administration.

A new magistrate in podunk county knows better.

It's off to the Supremes where the ban will be reinstated. 

TheCentrist
TheCentrist

It has been four months. More than enough time for his administration and Congress to have reviewed the immigration and refugee vetting system. Remember, he wanted the ban to find out what was going on, but we see that it was just more empty rhetoric like most of his statements.

JohnnyReb
JohnnyReb

Media including Fox is portraying the Montana incident where the Repub candidate slammed a reporter as negative.

In a state like Montana and considering the hysteria of MSM at the moment, I'm guessing they are completely missing it and that if anything the incident increased the support for the Repub. 

TheCentrist
TheCentrist

It is in line with 45's portraital of some of his supporters with his "murders on Fifth Ave." remark.

Doom a classical liberal
Doom a classical liberal

Anyone notice that after I hammered Hedley with testimony from the FBI director that the Russia investigation has never been impeded by Trump that Hedley has no response to that?  What can the boy say after I called him out on his bald faced lie that the white house had obstructed the investigation. He lied. And as usual I nailed the boy to the wall with it. LOL! 


SSDD. 

JohnnyReb
JohnnyReb

@Doom a classical liberal

Hedley is an obvious victim of LibProg propaganda, but his attempts to wind up Cons here are blatantly obvious.

Either that or he is a dunce.

Ychromosome
Ychromosome

@Doom a classical liberal Actually, I suspect there's been no reply because your premise may be faulty. "NEVER IMPEDED"  - look that up. It's different than being asked to halt something. 

Hedley_Lammar
Hedley_Lammar

Another day of schooling Doom


Mere child's play


This is a guy who thinks there was a "pause" in global warming.


Of course no such thing happened. 


Not very bright that one.

Visual_Cortex
Visual_Cortex

@Hedley_Lammar

Hey, is someone impressed when Classilib goes on a RACE CARD!! crying jag?

Because he does it a lot. I guess he at least imagines it's impressive.

Doom a classical liberal
Doom a classical liberal

"With the WH obstruction it may take years to get to the truth."- Hedley Lamar


One should never underestimate Hedley's ability to tell a bald faced lie.   


According to the acting FBI director there has been no attempt by the white house to impede the investigation. Get your schooling. 


"WASHINGTON – Sen. Marco Rubio, R-Fla., got straight to the point that is obsessing Democrats and the mainstream media, asking if the firing of former FBI Director James Comey had “impeded, interrupted, stopped or negatively impacted” any of the bureau’s investigations.


“There has been no effort to impede the investigation, to date,” replied acting FBI director Andrew McCabe.


He added, “Simply put, sir, you cannot stop the men and women of the FBI from doing the right thing, protecting the American people and upholding the Constitution.”


The acting FBI director also said he would “absolutely” notify Congress if the White House attempted to interfere in the bureau’s investigation into whether the Russian government meddled in the 2016 presidential election.


McCabe also contradicted reports by the Washington Post and New York Times that Comey was fired just days after seeking more resources for that investigation, including more prosecutors, other personnel and funding."



Hedley_Lammar
Hedley_Lammar

@Doom a classical liberal According to the acting FBI director there has been no attempt by the white house to impede the investigation.


Lets see what Comey says. He was the one fired after Trump told him to back off remember ?

Doom a classical liberal
Doom a classical liberal

@Hedley_Lammar @Doom a classical liberal


One more time, sir. Had Comey truly felt that Trump was demanding that the investigation be impeded or stopped then he was obligated to take this to his boss at the dept of justice. He did not. I'm not sure why your mind can't understand this. Furthermore, the investigation was not impeded after Comey took his notes where Trump supposedly asked him to stop it. The evidence is quite clear, sir. The investigation continued completely unimpeded, sir. Those are the facts. And they are not in dispute, sir. 

Hedley_Lammar
Hedley_Lammar

@Doom a classical liberal @Hedley_Lammar Well actually that is playing out now


The Obama thing was just a dog whistle to racist Republicans 


and we have conspiracy nuts a plenty who believed W caused 9/11.


Yes we do. The Trump WH just gave them WH Press credentials. infowars.com


I'm sure Trump believes a lot of what they report. 


Jade Helm 15. Newtown was a hoax. Etc.

Hedley_Lammar
Hedley_Lammar

"Who knows about Obama? ... Who knows, who knows? Who cares right now?... I have my own theory on Obama. Someday I will write a book, I will do another book, and it will do very successfully."


Donald J Trump

Hedley_Lammar
Hedley_Lammar

"How amazing, the State Health Director who verified copies of Obama's 'birth certificate' died in plane crash today. All others lived."


Donald J Trump

Hedley_Lammar
Hedley_Lammar

"An 'extremely credible source' has called my office and told me that @BarackObama's birth certificate is a fraud."


- Donald J Trump

Hedley_Lammar
Hedley_Lammar

"He doesn't have a birth certificate, or if he does, there's something on that certificate that is very bad for him. Now, somebody told me -- and I have no idea if this is bad for him or not, but perhaps it would be -- that where it says 'religion,' it might have 'Muslim.' And if you're a Muslim, you don't change your religion, by the way."


"I have people that have been studying [Obama's birth certificate] and they cannot believe what they're finding ... I would like to have him show his birth certificate, and can I be honest with you, I hope he can. Because if he can't, if he can't, if he wasn't born in this country, which is a real possibility ... then he has pulled one of the great cons in the history of politics."


This is the nutjob that you guys are blindly supporting. 

Doom a classical liberal
Doom a classical liberal

@Hedley_Lammar


Yawn. The birther thing was so 5 years ago. Move on, dude. And btw hardly any cons on this board believed he was not a U.S. citizen. But do continue with your outrage if it makes ya feel better. LOL!

Doom a classical liberal
Doom a classical liberal

@Hedley_Lammar @Doom a classical liberal


Premiums have doubled or more in at least 4 years in 36 states, Hedley. And most plans have $6,000 deductibles. Furthermore, many counties in America are down to  1 or 2 carriers only. Face it, Hedley. The death spiral is happening right before your very eyes. It is what it is. Last, the uninsured rate is lower only because the state coerces people to buy insurance. If your idea of doing things consists of govt bullying and coercion then you have truly found a home with the Dim party. 

Hedley_Lammar
Hedley_Lammar

@Doom a classical liberal @Hedley_Lammar The death spiral is happening right before your very eyes.


Been hearing that for years now


Yawn.


I guess the govt bullies people into getting car insurance too


You dont get to have a major medical event and then pass those costs onto others.