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Choice Complexity in Tax Benefits for Higher Education

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  • Davis, Albert J.

Abstract

This paper is a case study on "choice complexity." It is about the tax benefits for higher education, which have proliferated in recent years. The paper gives a tour through the major tax benefits and analyzes the choices faced by taxpayers, showing which circumstances make one tax benefit perform better than another. The larger purpose of the paper is to highlight the negative synergy that is produced by so many provisions--something that may not have been apparent as the provisions were enacted, because it was difficult to comprehend their interactions and their cumulative effect on complexity. The paper may also be helpful to parents who want to understand these benefits and make intelligent education financing decisions.

Suggested Citation

  • Davis, Albert J., 2002. "Choice Complexity in Tax Benefits for Higher Education," National Tax Journal, National Tax Association;National Tax Journal, vol. 55(3), pages 509-538, September.
    • Handle: RePEc:ntj:journl:v:55:y:2002:i:3:p:509-38
    DOI: 10.17310/ntj.2002.3.08
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    References listed on IDEAS

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    1. Shoven, John B. & Sialm, Clemens, 2004. "Asset location in tax-deferred and conventional savings accounts," Journal of Public Economics, Elsevier, vol. 88(1-2), pages 23-38, January.
    2. Nickerson, Jack A., 1999. "Learning by Doing in Markets, Firms, and Countries. Edited by Naomi R. Lamoreaux, Daniel M. G. Raff, and Peter Temin. A National Bureau of Economic Research conference report. Chicago: University of C," The Journal of Economic History, Cambridge University Press, vol. 59(3), pages 854-855, September.
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    Cited by:

    1. George B. Bulman & Caroline M. Hoxby, 2015. "The Returns to the Federal Tax Credits for Higher Education," Tax Policy and the Economy, University of Chicago Press, vol. 29(1), pages 13-88.
    2. Turner, Nick, 2010. "Why Don’t Taxpayers Maximize their Tax-Based Student Aid? Salience and Inertial in Program Selection," University of California at San Diego, Economics Working Paper Series qt0pb3f440, Department of Economics, UC San Diego.
    3. Hoxby, Caroline M. & Bulman, George B., 2016. "The effects of the tax deduction for postsecondary tuition: Implications for structuring tax-based aid," Economics of Education Review, Elsevier, vol. 51(C), pages 23-60.
    4. Turner, Nicholas, 2010. "The Effect of Tax-Based Federal Student Aid on College Enrollment," University of California at San Diego, Economics Working Paper Series qt6758069g, Department of Economics, UC San Diego.

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