The Friedman Foundation For Educational Choice

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Choice Media | Are Tax Credits Better Than Vouchers?

Wednesday, October 19, 2011

Choice Media


*Interview with Robert Enlow begins at 2:43

When asked to explain the differences between a voucher program and a tax credit program, Andrew Coulson, Director of the Center for Educational Freedom said “The best way to spend money, or the most efficient way to spend money is on yourself or on your family because you care about the money, having earned it and you care about the people it’s being spent on. You get a little less careful if you’re spending somebody else’s money.” He went on saying “the worst thing that could happen as far as efficiency goes is for you to get money from someone you don’t know and then to be asked to spend it on somebody else that you don’t know. You don’t really care what happens there. Well that’s how public schools are funded. And that’s essentially what public schools have been doing, wastefully for generations is re-shuffling people’s money in a way that hasn’t produced educational outcomes. Vouchers are a little better, you’re still spending the money on yourself but there’s still a third party. The best way to go is with a tax credit that lets families keep more of their own money to spend on themselves.”

“Education tax credits can also come through foundations. This means that if an organization is giving out scholarships it would be always thinking about the wisest way to hand out that money, because they want to be rewarded more money than that other scholarship fund.” Bowdon asked.

“Exactly, actually a competition between scholarship organizations. It’s like charities in general, the charities that are known to be thrifty, efficient with the money, not high overhead are the ones that generate the most donations.” Coulson answered.

In response to a question regarding tax credits creating downward pricing pressures on schools as opposed to vouchers whose tuition is set by the government, Coulson explained “When voucher programs pass, they’re passed with regulations; you know who can teach at the school, what can be taught, what tests you have to use. And I studied how much regulation is imposed on private school choice programs and I found that the voucher programs impose a lot more regulation than tax credit programs do.” He added “With a tax credit program, because parents get to choose which scholarship organization they seek a scholarship from it enables them to dodge any rules that particular scholarship organization might have. So there’s a lot more voluntarism, a lot less compulsion, a lot less regulation.”

In a separate interview, Bowdon asked President and CEO of the Foundation for Educational Choice Robert Enlow his views on tax credits in place of vouchers and charters. Enlow responded saying “So more choices are better than less, we need to have serious debates in this movement about different forms of school choice. Right now the biggest issue is that we have poor quality of education. We’re not competing globally, there too many kids that are falling behind, spending more than any other country and the results even for our brightest kids aren’t working. So we’re not getting the kind of education our children need. So they’re graduating from high school with a thimble full of capital instead of a bucket full of human capital which impacts job creation, wealth, Medicaid usage, incarceration.” He went on to add “we need to do everything we can. And in some ways this debate about what the best method of school choice is like going into a fire and arguing whether the guy on the ladder is better placed to put out the fire versus the guy on the ground. The fact is we’ve got a fire to put out and we’ve got to use every useable means to do so.

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