States using "neovouchers" – or backdoor vouchers – to encourage donations to private school scholarship funds or to offset the costs of private school tuitions illegally allow wealthy taxpayers to turn a profit when making charitable contributions to private schools, according to a new report by the Institute on Taxation and Economic Policy.
"A thriving public education system relies on public investment," American Federation of Teachers President Randi Weingarten said in a press statement, pointing out that GOP presidential nominee Donald Trump champions tax credits as part of his education agenda. "That’s why publicly funded vouchers pauperize schools; they drain cash away from public school districts, particularly those that serve disadvantaged kids who can least afford it."
According to the report, 10 out of 20 states reviewed allow tax filers to bring in more from combined state and federal credits and deductions than they donate, a loophole that the report's author said makes their donations more like money laundering than philanthropy. Further, the report said that most of the money going to public schools comes from state government, and so a reduction in taxable state income, off-set by this loophole, means less state funds go to public education.
"ITEP found that in many states, including Pennsylvania and South Carolina, the wealthy can reap millions, while public schools continue to face deep cuts," said Weingarten. "This isn’t a bug, it’s a feature. And while it’s not surprising that Donald Trump is championing tax credits as the centerpiece of his education agenda, it’s another piece of evidence that he intends to decimate public schools."
The states involved are Alabama, Arizona, Georgia, Louisiana, Montana, Oklahoma, Pennsylvania, Rhode Island, South Carolina and Virginia, which allow state tax credits to be paired with federal charitable deductions to realize a profit.
Sandy Fitzgerald ✉
Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics.
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