Donating the Voucher: An Alternative Tax Treatment of Private School Enrollment
In: Tax Policy and the Economy, Volume 27
AbstractApproximately 10% of school-age children in the United States are enrolled in private schools, relieving the financial burden on public school systems, and the taxpayers who support them, of the cost of their education. At present, the tax code does not allow families who provide this financial relief an income tax deduction, even though such relief is a gift to governments for exclusively public purposes and thus is analogous to a charitable donation. Using the Public Use Microdata Sample of the American Community Survey and the NBER Internet Taxsim calculator, this paper estimates that granting families who enroll their children in private schools an income tax deduction equal to the per-pupil expenditures in their public school district would cost the federal government an average of $7.75 billion per year over the 2006â10 period. This amount is less than 1% of federal income tax revenues. Because private school enrollment, public school expenditures, the likelihood of itemization, and marginal tax rates increase with taxpayer income, the dollar benefits of this change are positively related to income. At the margin, high-income taxpayers would receive about 35 cents in federal and state tax relief for each dollar of per-pupil expenditures forgone.
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Other versions of this item:
- Andrew A. Samwick, 2013. "Donating the Voucher: An Alternative Tax Treatment of Private School Enrollment," Tax Policy and the Economy, University of Chicago Press, vol. 27(1), pages 125 - 160.
- Andrew A. Samwick, 2012. "Donating the Voucher: An Alternative Tax Treatment of Private School Enrollment," NBER Working Papers 18525, National Bureau of Economic Research, Inc.
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- I22 - Health, Education, and Welfare - - Education - - - Educational Finance
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- Figlio, David N. & Stone, Joe A., 2001. "Can Public Policy Affect Private School Cream Skimming?," Journal of Urban Economics, Elsevier, vol. 49(2), pages 240-266, March.
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