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ERIC Number: ED558035
Record Type: Non-Journal
Publication Date: 2014-May
Pages: 2
Abstractor: ERIC
Reference Count: N/A
ISBN: N/A
ISSN: N/A
Donating the Voucher: An Alternative Tax Treatment of Private School Enrollment. Research Briefs in Economic Policy, Number 1
Samwick, Andrew
Cato Institute
In the United States, parents send about 10 percent of elementary and secondary school-age children to private schools, which through their accreditation meet the requirement that students receive an adequate education. By paying out of pocket for their children's private education, these families relieve a financial burden on local, state, and federal taxpayers, who would otherwise have to fund the public education of these children. If sending children to private schools generates a positive externality, then parents may be underutilizing private schools because they do not consider the financial benefit they provide others by sending their children to private schools. To see the implications of this externality for tax policy, consider that the current arrangement is equivalent to the following: all families with school-age children receive vouchers in an amount equal to the per pupil expenditures in their school district. Most families take these vouchers to their local public schools and redeem them for educational services. The others return the vouchers to the school district unclaimed. This voucher donation by parents who use private schools enables public school districts to reduce their expenditures on public education; this is the beneficial externality. The author's research examines one way to offset this externality: allow a federal (and possibly state) tax deduction for parents who send their children to private schools, in the amount of the per pupil expenditure in their local public schools. In this brief document, the author discusses his research on voucher donations and thoughts on allowing tax relief for parents sending their children to private schools. [For the full report, "Donating the Voucher: An Alternative Tax Treatment of Private School Enrollment. NBER Working Paper No. 18525", see ED541254.]
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Publication Type: Reports - Research
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: Cato Institute