Donating the Voucher: An Alternative Tax Treatment of Private School Enrollment
AbstractApproximately 10 percent 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 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 2006 – 2010 period. This amount is less than one percent 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 foregone.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18525.
Date of creation: Nov 2012
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Publication status: published as 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.
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Other versions of this item:
- Andrew A. Samwick, 2013. "Donating the Voucher: An Alternative Tax Treatment of Private School Enrollment," NBER Chapters, in: Tax Policy and the Economy, Volume 27, pages 125-160 National Bureau of Economic Research, Inc.
- 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.
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-17 (All new papers)
- NEP-PBE-2012-11-17 (Public Economics)
- NEP-URE-2012-11-17 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Martin Feldstein & Daniel Feenberg & Maya MacGuineas, 2011. "Capping Individual Tax Expenditure Benefits," NBER Working Papers 16921, National Bureau of Economic Research, Inc.
- 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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