Cato Renounces School Vouchers

But I don’t mind, because it keeps me up to date with what extremist libertarians say when they think they’re talking to one another. For example, today I learned that Greg Anrig was right — conservatives really are abandoning vouchers. Unfortunately, they’re abandoning them for something even worse. From the new Cato’s Letter, here’s an excerpt from an “interview” with Andrew Coulson, the Director of Cato’s Center for Educational Freedom:

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.

This policy would be slightly better if the tax credit were refundable (it’s not; that’s how you get the “substantial savings”). But that still wouldn’t help a poor family that needs to write a tuition check in August and wouldn’t get their tax refund until February. Of course, one could envision some kind of advance-refund system, where the check comes in August–but wait, that’s exactly the same thing as a voucher, isn’t it?

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. In other words, some conservatives are concerned that parents, exercising their freedom and personal liberty, would use their vouchers to support schools with non-conservative values. The solution? Lie and pretend that tax credits aren’t the same thing.

Frankly, I prefer the begonias.

Update: Non-extremist libertarian Megan McArdle offers some smart critiques of tax credits here, while Matt Yglesias notes the futility of attempting to craft good public policy from an essentially anti-government stance here.