Donating the Voucher: An Alternative Tax Treatment of Private School Enrollment

Andrew Samwick

No 18525, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Approximately 10 percent of school-age children in the United States are enrolled in private schools, relieving the financial burden on public school systems, and the taxpayers who support them, of the cost of their education. At present, the tax code does not allow families who provide this financial relief an income tax deduction, even though such relief is a gift to governments for exclusively public purposes and thus analogous to a charitable donation. Using the Public Use Microdata Sample of the American Community Survey and the NBER Internet Taxsim calculator, this paper estimates that granting families who enroll their children in private schools an income tax deduction equal to the per-pupil expenditures in their public school district would cost the federal government an average of $7.75 billion per year over the 2006 - 2010 period. This amount is less than one percent of federal income tax revenues. Because private school enrollment, public school expenditures, the likelihood of itemization, and marginal tax rates increase with taxpayer income, the dollar benefits of this change are positively related to income. At the margin, high-income taxpayers would receive about 35 cents in federal and state tax relief for each dollar of per-pupil expenditures foregone.

JEL-codes: H24 I22 (search for similar items in EconPapers)
Date: 2012-11
New Economics Papers: this item is included in nep-pbe and nep-ure
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Published as Andrew A. Samwick, 2013. "Donating the Voucher: An Alternative Tax Treatment of Private School Enrollment," Tax Policy and the Economy, University of Chicago Press, vol. 27(1), pages 125 - 160.
Published as Donating the Voucher: An Alternative Tax Treatment of Private School Enrollment , Andrew A. Samwick. in Tax Policy and the Economy, Volume 27 , Brown. 2013

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Chapter: Donating the Voucher: An Alternative Tax Treatment of Private School Enrollment (2013)
Journal Article: Donating the Voucher: An Alternative Tax Treatment of Private School Enrollment (2013)
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