Kevin Carey (via Yglesias) notes that the Cato Institute has moved from supporting vouchers for private schools to tax credits. Yglesias and Carey both go over the basic objection to this scheme: not only are all the problems with vouchers still applicable to tax credits - the results aren’t any better, voucher programs often “leave behind” kids in special education programs in public schools, they drain resources etc etc - but the credits are incredibly regressive. Carey estimates that using Cato’s “sample legislation” that a DC family making 20,000 dollars a year would only get a credit of $200, hardly enough to pay tuition at a private school. And if the credit is for income taxes, it does nothing for those who are too poor to pay income taxes - who, of course, are the very people that Cato et al want to be going to private schools.

The second part of the proposal that makes no sense is that one of the rationales is that voucher programs lead to direct taxpayer subsidy of private education options that taxpayers could object to. For example, taxpayers could well object to funding Catholic education or Islamic education. According to Cato, with the tax credits, “With tax credits, people are either spending their own money on their own children…No one has to pay for education they find objectionable.” And while the tax credit wouldn’t result in direct, compulsory funding of objectionable educational options, Cato is being sketchy with saying that there’s a substantial difference. After all, the very purpose of these tax credits is to fund private education just like vouchers, without the direct government subsidy. Carey says “The political rationale for the policy, meanwhile, rests on the fiction that there’s a difference between the government handing you a dollar and the government not making you pay a dollar you would have otherwise owed in taxes.”