The American Enterprise Institute, previously known as a center-right Washington think tank, is out with its second New York Times op-ed in a week opposing President Trump's tax cut bill. I wrote about the first one earlier here, and my point about how "Heterogeneity within think tanks is great" still applies. The second Times piece comes from Nat Malkus, "a resident scholar and the deputy director of education policy at the American Enterprise Institute," who complains that a Republican provision to allow the use of 529 college savings accounts for K-to-12 private education expenses "creates outsize impacts on the state income tax bases in the 33 states that instituted state tax deductions and tax credits to encourage 529 college savings."
Malkus writes:
Expanding 529 plans to deliver state deductions to private school families will erode the tax base that funds public schools, affecting high-poverty schools the most. By limiting state and local tax deductions at the same time, Republicans would make it harder for states and cities to raise taxes to make up for those shortfalls.
This is pretty much the identical argument made by the left-wing group Think Progress. I'd be affected by this one because I have children at a Jewish day school and have 529 accounts for them, though I live in a state with no state tax deduction for those accounts. But I think it's a weak argument regardless. First, there's an assumption that the state, rather than the families, have the default first claim on this money. Second, there's a failure to acknowledge that private school families are already paying plenty of state and local taxes to support public schools that they are not using. Third, nothing is stopping the states themselves, if they are concerned about "revenue loss," from getting rid of these tax breaks. My own state, Massachusetts, has what some rankings say is the best k-12 public education system in the country and has no state 529 tax break.
Malkus writes:
The easiest fix is to eliminate the 529 expansion, a federal action that transfers state tax dollars from the poor to the rich and which won't substantively increase school choice for those who do not already have it. Doing so would be a principled stand for the party that professes to protect state sovereignty. Not doing so will affirm the worst caricature of Republicans and education — taking money from the poor to give to the rich.
The error here is that these dollars aren't really "state tax dollars." They are money that is earned by families. The money isn't being "transferred" from the poor to the rich. It doesn't belong to "the poor" to begin with. It belongs to the people who earned it. Any "taking" happening is the government taking it from the people who earned it. There is no "give to the rich" here because you can't "give" someone something that is theirs to begin with. In fact, plenty of parochial and private schools serve low-income inner-city families precisely because under the current system urban public schools, though lavishly funded, are not as good as are public schools in wealthy suburbs.
Anyway, of all the causes of rich-poor educational inequality — powerful unions, arbitrary political boundaries, "white flight," court-ordered busing, government monopolies, poverty, family breakdown, racism — it seems odd to me to highlight and blame families who are already making considerable sacrifices to send their children to non-public schools. AEI and the New York Times may describe those families as "the rich," but in many cases that's not necessarily an accurate description of these families after they are done paying both their school tuition bills and their tax bills for the public schools they aren't using.
