Why tax credits may be better than vouchers

Tax credits are easier to sell as a concept than vouchers are, and may be the way forward for school choice, an article suggests.

Pollsters say people in the US favour tax credits at a level eight to 14 percentage points higher than they support vouchers.

Three states - Arizona, Florida, and Pennsylvania - have recently set up tax credit programmes. Since 1998, Arizona taxpayers have been able to get a dollar-for-dollar refund of up to US$500 for contributions to state-approved charitable organisations, which bundle the money together to provide scholarships worth up to 80 percent of private school tuition to needy kids.

These organisations handed out nearly 20,000 scholarships last year. In Florida and Pennsylvania, it is businesses that receive the tax credits. Florida firms can get a dollar-for-dollar tax credit off their corporate income tax if they contribute to state-sanctioned scholarship-funding organisations.

The Pennsylvania Educational Improvement Tax Credit (EITC) programme last week celebrated its third anniversary.

The EITC programme, is recognised by many as a national model for education tax credits, and has funded more than more than 35,000 scholarships.

To date, the business community has contributed more than US$100 million to it.

The tax credits article is at this web page.

More information on EITC is at this web page.