More “fair taxes” and higher tax burdens may not improve education
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A new report from the Florida Policy Institute (FPI) takes aim at the Florida Tax Credit Scholarship. The report, “Silent Spending, Florida’s Shadow Budget Needs More Scrutiny,” improves tax equity by eliminating up to $23 billion in tax credits, deductions, and exemptions, thereby boosting government revenues. I would like to increase it.
Tax credits covered by FPIs include the Florida Tax Credit (FTC). The FTC provided scholarships to 86,726 low- and middle-income students last year, 73% of whom are nonwhite.
“The question remains whether revenues that would otherwise be used for general public purposes should be used for private school education,” the report’s authors wrote.
Aside from the fact that the issue is largely settled: Opponents of scholarships have lost court cases three times in the last decade, scholarships have been in law for 21 years, and millions of We offer more scholarships. , most of whom are children of color.
Contrary to FPI’s claims, the FTC serves the “general public purpose” of educating students. The benefit to the general public (the educated masses) remains the same whether that education is provided in private or public schools.
What’s more, while the FTC’s repeal raises government revenues, it also means the state will lose twice as much as it gains. The average scholarship this year is about $7,700, but Florida school districts are spending more than double her per student from all sources.
The FPI argues that eliminating these tax expenditures will increase government revenues and allow the government to spend additional revenues on improving public goods.
“Sacrificing $23.6 billion simply collects the lost money and invests it in better public schools, safe and affordable housing, reliable transportation infrastructure, clean water and energy, and robust security. It is unclear whether it will lead to more socially desirable outcomes than providing funding,” the report said.
But it is equally uncertain whether eliminating these “tax expenditures” would improve anything.
Higher tax equity does not appear to be related to educational outcomes as measured by progress in national education assessments. Using the Urban Institute education rankings, which provide statewide comparisons adjusted for race and income, we find that states with high equity achieve exceptional educational outcomes on average.
California, which ranks first in the tax equity rankings, ranks 28th in 4th grade math and 33rd in 8th grade math. Vermont was second in the tax equity rankings, at 46th and 30th respectively.
Tax equity may result in a lower share of total income for lower-income taxpayers than higher-income taxpayers, but it does not mean a lower total tax burden. It may actually be higher. Even worse, you may end up paying high taxes for poor service. In fact, the top 10 tax equity states averaged 27th in math, but their residents pay very high taxes, averaging 40th as measured by the Tax Foundation.
In contrast, Florida ranks 48th in tax equity, but the overall tax burden on taxpayers is relatively low, ranking 11th lowest in the nation. Florida ranks 1st in 4th grade math and 7th in 8th grade math on the National Educational Progress Assessment. Texas also scores poorly on tax equity, but ranks 6th for lowest tax burden, 2nd for 4th grade math, and 4th for 8th grade math.
If you’re a low-income parent of color, would you want to live in Florida, where tax equity is low but your children’s academic performance is high? Is California a low tax and potentially high tax burden?
This scholarship program has a 21-year history of educating the most disadvantaged and hardest-hit students in the state. Over a decade of research shows that scholars, even with their handicaps, are in step with the educational background of all students across the country. Additional research by the Urban Institute shows that scholars are up to 99% more likely to attend college and up to 45% more likely to receive a bachelor’s degree than public school students.
Tax credits, deductions, and waivers deserve more scrutiny as to whether they are unfair or fail to serve the public good, but tax credit scholarships are not one of them.
Patrick Gibbons is the Senior Manager of Public Relations for Step Up For Students, a non-profit organization that manages educational selective scholarship programs in Florida.
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