November 2, 2017 4:05PM # Good Intentions, But No 529 Plans for K‑12, Thanks By [Neal McCluskey](https://www.cato.org/people/neal-mccluskey) --- SHARE ![Media Name: leviathan_by_thomas_hobbes.jpg](/sites/cato.org/files/styles/pubs_2x/public/social-images/leviathan_by_thomas_hobbes.jpg?itok=g5Xdh5YV) It sounds like school choice fans are [pretty happy](http://blogs.edweek.org/edweek/campaign-k-12/2017/11/taxes_school_choice_trump_GOP_biggest_education_shift.html) to see the [GOP tax plan](https://waysandmeans.house.gov/taxreform/) allowing up to $10,000 per year from tax-favored 529 savings plans to be used for elementary and secondary expenses (though the much smaller [Coverdell](https://www.forbes.com/sites/baldwin/2013/02/28/coverdells-or-education-savings-accounts/#7444a39a3943) would go away). Previously, 529 funds were just applicable to postsecondary education. But happy or not, for several reason this is probably bad policy. Here’s a quick list: 1. **Regulation:** Current 529 plans allow earnings to be used tax free only if spent on accredited institutions. But accreditation has been a backdoor way through which the federal government has [regulated colleges](https://www2.ed.gov/admins/finaid/accred/accreditation_pg3.html#Recognition). We don’t want to see private K‑12 schools similarly subjected to federal control, greatly constricting the extent to which they can be *real* choices. 2. **Complication:** A complicated federal tax code is an [efficiency drain](https://www.ntu.org/foundation/detail/tax-complexity-2017) on the economy, but wealthier people able to pay for financial advisors, or who have the time to become well versed in the code, can game the system. Ditto [student aid](https://www.wsj.com/articles/to-maximize-college-financial-aid-timing-is-key-1508526374). Not so much the poor or average person. The 529 thumb-on-the-scale for education would seem to favor the wealthy who already have choice. Much better would be to just get rid of this kind of distorting, complicating incentive. 3. **Price:** The evidence is powerful that student aid programs—including, though not primarily, tax incentives—help to [fuel extraordinary price inflation](https://www.cato.org/research/reading-list-college-aid-not-helping-students) in higher education. Better to not have the feds inject this further into K‑12 education. 4. **Constitution:** Outside of prohibiting discrimination by state and local governments, the Constitution gives the federal government [no authority](http://www.constitution.org/fed/federa41.htm) to meddle in education. This includes through the tax code. Worse things, certainly, could have come from Washington. School choice is, after all, generally a policy well worth pursuing. But so is federalism, and states have been doing [pretty nice work](https://www.edchoice.org/resource-hub/fast-facts/) expanding choice by themselves. Why introduce these unconstitutional dangers? ##### Related Tags [Education](https://www.cato.org/education), [Tax and Budget Policy](https://www.cato.org/tax-budget-policy), [Center for Educational Freedom](https://www.cato.org/center-educational-freedom) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).