ERIC Number: ED450192
Record Type: Non-Journal
Publication Date: 2001-Feb-23
Reference Count: N/A
Toward Market Education: Are Vouchers or Tax Credits the Better Path? Policy Analysis No. 392.
Coulson, Andrew J.
This paper compares voucher and tax credit programs on how well they manifest the necessary conditions for market education and allow all families to participate in that market. Voucher programs include targeted and universal programs. The tax credit proposal is a nonrefundable, education credit composed of: a parental choice credit for taxpayers with dependent school age children and a scholarship component to allow businesses and individuals to write off donations made to scholarship-granting organizations. Conditions necessary for operating an effective education market are: parental choice; direct parental financial responsibility; freedom for educators; competition among educators; the profit motive for educators; and universal access. Tax credits are more effective at implementing freedoms and incentives necessary for effective operation of the market, offering greater resistance to new regulation, decreasing the risk of fraud and corruption, and avoiding problems arising from state funding of religious schools. They also have some weaknesses, which make them difficult to implement in certain states. Universal voucher programs effectively guarantee funding to all needy families but dramatically increase the risk of government intervention. Targeted voucher programs provide funding to the poorest families but would leave middle- and upper-income families with strong financial disincentives to choose private schools. (SM)
Descriptors: Access to Education, Educational Finance, Educational Vouchers, Elementary Secondary Education, Private School Aid, Private Schools, School Choice, Tax Credits
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Publication Type: Reports - Evaluative
Education Level: N/A
Authoring Institution: Cato Inst., Washington, DC.