U.S. Supreme Court rightly rejected bogus challenge to a valuable school choice program
By Randy Hicks
Earlier this month thousands of Georgia school kids barely averted what could have been a major blow to their educational futures. Thankfully, the U.S. Supreme Court ruled correctly in a case that protects their education and their parent’s ability to choose how and where they get it.
The case before the nation’s highest court was a challenge to a student scholarship program in Arizona, which is very similar to one that is benefitting thousands of kids in Georgia. The program provides an income tax credit for donations to nonprofit tuition scholarship organizations. These nonprofits then give scholarships to kids so they can afford to transfer from a public to a private school.
Here in Georgia, it’s called the Tuition Tax Credit Scholarship. It was approved by the General Assembly in 2008 and is serving nearly 8,000 students in hundreds of schools across the state.
In Georgia, Arizona and several others states, this scholarship program is giving families the ability to choose where their kids get educated. Georgia Family Council, where I work, strongly advocated for the law at the General Assembly as a way to give middle and lower income families access to an education that is better suited to their children’s needs. The program has proven to be of particular benefit to families whose children are stuck in poor performing schools.
But not everyone sees it that way. Enter the ACLU.
The ACLU in Arizona filed a lawsuit on behalf of a group of taxpayers challenging the program as a violation of the establishment clause. They claimed that because tax credits were being given for donations to scholarships that might be used toward tuition at religious schools, it amounted to a government endorsement of religion. Did you follow that logic?
Here’s the problem with the ACLU’s position. The program is completely neutral. It does not endorse any religious behavior or practice. Families who receive a scholarship choose where the money goes, not the government. Moms and dads decide whether to use the funds at a secular or religious private school. The constitution requires that the government remain neutral, not the families using the program.
The ACLU made another curious claim. They reasoned that the tax credit provided by the state amounted to the government handing over money to scholarship organizations. But this assumes the money donated toward scholarships belongs to the government, not private citizens. In reality money never reaches the government at all, under the program. The Court dismissed this crazy claim saying, “When Arizona taxpayers choose to contribute to STO’s (scholarship organizations), they spend their own money, not money the State has collected from respondents or from other taxpayers…. Private bank accounts cannot be equated with the Arizona State Treasury.”
Apparently, ACLU attorneys wake up every day worrying that some children might be praying in a school that’s received money that could have been the government’s. That’s right. We’re not talking about money that is the government’s, we’re talking about money that could have been taxed and raked into government coffers. By that logic, not one single cent of anyone’s private financial resources can be spent on anything of a religious nature because there’s nothing that can’t be taxed.
The U.S. Supreme Court rightly rejected the claims of the lawsuit – finding that those who brought the suit lacked the legal standing to do so. The Court also rejected the claim that money donated to the program amounted to the government handing over money to a scholarship organization or that an establishment of religion claim could be made.
The tuition tax credit scholarship won out in the end. It was a win for private financial choices, it was a win for a sensible scholarship program, it was a win for families’ ability to choose for themselves where their child should attend school. But more than anything else, it was a win for thousands of school children who get up each morning and attend a better school because their family could make that choice.
Randy Hicks is the president of the Georgia Family Council, a non-profit research and education organization committed to fostering conditions in which individuals, families and communities thrive.
Re: The Arizona Tax Credit For School Tuition Organizations
ReplyDeleteLet me see if I understand this. I want to help a Catholic family send their child to a Catholic school, so I give $500 to one of the School Tuition Organizations. Then when I pay my taxes, I get a full tax credit for that contribution, which reduces the amount of tax I owe by $500. My charitable contribution has seemingly cost me nothing.
The actual net effect is that I have spread the cost of my charitable contribution among all the taxpayers. Here's how. The tax credit costs the state of Arizona a certain amount of revenue. The state will have to make up for the loss by imposing slightly higher income tax rates.
Let's say I could do the same thing for a woman seeking an abortion. I give Planned Parenthood a $500 charitable contribution so that a woman can get an abortion. I'm then allowed to take that $500 contribution as a tax credit, thereby reducing my taxes by $500. I have spread the cost of my charitable contribution among all the taxpayers by making them pay just a little bit more in income tax.
In fact, I may have succeeded in getting others to contribute more money to the abortion than I contributed. As I said, the revenue loss to the state of Arizona due to the tax credit must be made up by imposing slightly higher income tax rates. Arizona has a progressive income tax structure. If I am in a low tax bracket, then I pay only a small amount to make up for the tax credit. Those with higher incomes pay more. I have succeeded in getting high income earners to contribute more money to the abortion than I did.
Would that be OK with you, Al?
You have a few glaring errors of assumption mauman. Your argument rests on you incorrect theory that because of the credit, everyone's taxes would be raised.
ReplyDeleteFirst of all, in Georgia this is not a refundable credit, meaning that the ~50% of Georgia, Arizona, taxpayers who have a tax liability of zero are not costing the Georgia treasury a penny. In other states with similar programs, the contribution is merely a deduction which only reduces their tax liability marginally.
Second, for your argument to be consistent, you must oppose ALL tax credits and deductions. according to your argument, if I get a deduction for my morgage interest, everyone helps pay for that. If I contribute to my Church or an atheist donates to Americans United for Separation of Church and State, everyone pays for that contribution.
- Nick
Nick,
ReplyDeleteI used $500 in my example because that's the maximum tax credit in Arizona for contributions to STOs. ($1,000 for joint filers). I used it to illustrate the essential problem with the tax credit. If a person's tax liability before taking the credit is less than $500, then yes, he will not get the full tax credit.
Once again. Suppose a person gives $500 to an STO and then uses the tax credit to reduce his income tax by $500. Did he really pay for that contribution? If he didn't, who did? Explain it to me.
I didn't mention tax deductions because the item you posted was about tax credits. It would have been gratuitous of me to mention tax deductions.
You mentioned "taxpayers who have a tax liability of zero." Interesting. Taxpayers who pay no tax. Hmm. Anyway, my comment only addressed people who use the tax credit. Your attempt to obfuscate the issue by including "taxpayers who have a tax liability of zero" is really quite lame -- maybe even dishonest.
Yes. I think we should get rid of all tax deductions and tax credits. Government uses them to affect our behavior. I don't want government doing that. In fact, I would go even further -- no government funding of education. It's redistribution of income. In other words, taking money by force from one person and giving it to another. Doesn't one of the Ten Commandments say that's a no-no?
This topic gives me an opportunity to bring up a subject that riles conservatives. Almost half of U.S households pay no federal income tax. In fact, many get money from the government. We have this problem because the federal tax code subsidizes children, mainly due to the Earned Income Tax Credit and the Child Tax Credit.
Do you think it's right that almost half of U.S households pay no federal income tax? If you don't think it's right, how would you fix it?
TurboTax's TaxCaster is a fun and easy way to see why nearly half of U.S households pay no federal income tax.
ReplyDeleteUnder 'Your Personal Information,' move the button from 'single' to 'married.'
Now go down and click on the 'Your Income' icon. Slide the little marker under 'Wages' to the right until you see $50,000 in the little window. Way over on the right side you'll see that you owe the federal government $3,061. Click on the orange 'Done' button.
Now go down and click on the 'Family' icon. You can see that the number of dependents (16 or younger) is 0. Click twice on the button with the little up arrow. (Don't click the dependent button too fast. It might give you a wrong answer.) You now have 2 dependents. Over on the right side you'll see that you get $34 from the federal government.
Increase the number of dependents to 4. That gets you $3,127 from the federal government.
You can see why nearly half of U.S households don't pay any income tax.
It's fun to play around with it. Hit the orange 'Done' button and you're back to the starting point.
See what happens when you lower your income from $50,000 to $30,000 by once again clicking on the 'Your Income' icon. (Remember, you still have 4 kids.) Slide the 'Wages' marker back to the left so that you have an income of $30,000. Notice that you now get $8,662 from the federal government.
What happens when you lower your income even more? What if you have 5 kids?
I think it's fun.
And informative.