Federal Education Tax Credits. So Close, and yet…

Senator Rick Santorum (R-PA) has introduced a federal education tax credit bill (“America’s Class Act”) modeled on a program in his home state. The Pennsylvania program is indeed an excellent concept, allowing businesses to make tax-creditable donations to private scholarship funds that in turn help low income families gain access to independent schools. Donation tax credit programs such as this are one of the two critical components in an ideal market education policy (the other being a personal tax credit for parents who choose independent schools for their children).

Unfortuntalely, the unmitigated merits of this policy at the state level are heavily mitigated at the federal level. First, because the Federal government is accorded no role in education whatsoever by our Constitution (“oh, that old thing?!”). And second, because any regulatory encroachment of the independent education sector by the federal government will suffocate schools from sea to sea, leaving nowhere for truly independent schools to thrive.

I’ve already made this case with respect to vouchers, and while I’m more fond of tax credits as a market education reform, federal involvement in this area is still problematic.