Which is better, vouchers or tax credits? Yes.


Author: Joshua Thompson

The Cato Institute's Andrew Coulson has a very interesting piece in the Philadelphia Inquirer arguing that education tax credits are fundementally superior to education vouchers. His main argument is that, "donations made under the tax credit are private and voluntary, and the donors decide which [school tuition organization] receives their money. Under a voucher program, every taxpayer must support every type of private school – even ones that may violate their convictions."  It is an interesting argument, and one that doesn't strike me as intrinsically flawed.

Indeed, since the Supreme Court's decision in Arizona Christian School Tuition Organization, tax credit schemes may be the simplest avenue for education reformers to inject some much needed choice into the government education monopoly.  And if tax credit schemes are more easily enacted by legislatures, then by all means, let's stop the constant bickering over vouchers and enact the tax credit schemes ASAP.  Education reform is needed now, and vouchers or tax credits are both dramatic improvements over the status quo.

Yet, I think Mr. Coulson oversells his case for tax credits when he writes, "[c]ompelling every taxpayer to support every type of education is, in the words of Thomas Jefferson's Virginia Declaration of Religious Freedom, 'tyrannical.'"  No, vouchers aren't tyrannical.  I wouldn't even say a government run education monopoly is "tyrannical."  (Though the latter is much, much closer than the former).

Are tax credits better than vouchers?  Quite possibly.  Mr. Coulson has definitely done the research, and his argument makes intuititive sense.  But let's not make the perfect the enemy of the good.  There is no need to bash vouchers on the way to making the case for tax credits.