My wife and I moved into our house on Capitol Hill almost seven years ago. At first, we got a lot of mail addressed to the previous residents. But over time, people figured out that the old owners had moved to Bethesda so their kids could go to school in Montgomery County (this drives roughly 95% of all home sales in my neighborhood). Gradually, the volume of misaddressed letters and magazines trickled to a stop. As of now, there are only two organizations left that are still sending me someone else’s mail. One is a seed catalogue based in the Midwest, which keeps offering free samples of sunflowers and begonias. The other is the Cato Institute.
In your view, what is the most promising proposal for reform in education policy?
The best realistic policy we’ve developed is a combination of personal use tax credits and scholarship donation tax credits. Basically, if you pay for the education of your own or someone else’s children, we cut your taxes. Cato published model legislation along these lines last December and we’ll soon be releasing a tool that estimates its fiscal impact. In all five states we’ve looked at so far, this proposal would generate substantial savings.
Why are tax credits superior to vouchers?
The key benefit of tax credits is that they reduce compulsion. Under vouchers, everyone has to fund every kind of school; that produces battles over what kinds of schools should get vouchers–for instance over the voucher funding of conversative Islamic schools in the Netherlands. With tax credits, people are either spending their own money on their own children, or they are choosing the scholarship organization that gets their donation. No one has to pay for education they find objectionable.
“Substantial savings,” is, of course, Cato-speak for “substantial disinvestment in public education.” And the problem with tax credits is that they only help people who make enough money to pay taxes. Cato’s model legislation includes a credit against sales taxes, but that’s still a tiny amount, less than $200 for a family with an income below $20,000 living in DC. So I assume that with this policy shift, Cato will no longer be claiming the moral high ground in this debate by asserting that they’re just trying to help poor inner-city children escape the dysfunctional public school system. Their only defense is to assume that some kind of massive, tax credit-financed infrastructure of “scholarship”-granting charities will emerge from the ether to help students in need.