Mercedes Schneider explores a paper published by Carl Davis of the Institute on Taxation and Economic Policy, in which he explains how tax credits for vouchers allow the rich to cut their taxes and make a profit. With such an alluring inducement by the states and the federal government, people of great means are able to reduce their taxes and undermine public schools at the same time. And, as they do great harm to the majority of children enrolled in increasingly underfunded public schools, they will be celebrated as “philanthropists,” when they are, in reality, raiders of the public good.

Davis’ paper begins like this:

<blockquote>One of the most important functions of government is to maintain a high-quality public education system. In many states, however, this objective is being undermined by tax credits and deductions that redirect public dollars for K-12 education toward private schools. Twenty states currently divert a total of over $1 billion per year toward private schools via special tax credits and deductions. These tax subsidies are essentially backdoor voucher programs, or “neovouchers,” as they use the tax code to provide what amount to private school vouchers even when traditional voucher programs are unpopular with the public or outright unconstitutional.

Because of the ways that state and federal tax law interact, the subsidies offered in ten of these states turn the concept of a charitable “donation” on its head by offering upper-income taxpayers a risk-free profit on contributions they make to fund private school scholarships. In these cases, even taxpayers who would not ordinarily be interested in contributing to private schools may find the incentive too strong to ignore.