Public Loss Private Gain: How School Voucher Tax Shelters Undermine Public Education

This report examines current trends in state tuition tax credit (TTC) policies and how proposed federal TTC policy could harm school district finances across the country. The report is divided into five sections. Part I explains the concept of tuition tax credits, why they were created, how they operate, and why they prove to be more lucrative for wealthy taxpayers than other charitable giving incentives. Part II describes the variations in how TTCs are set up and supervised by states. Part III focuses on the proposed federal legislation, the Educational Opportunities Act, and its various shortcomings, including how it would create avenues for corporations and successful investors to profit off their donations. Part IV outlines other issues associated with TTCs, including how they undermine public education. Part V concludes with action steps at the state and federal level that could protect education funding and reduce the prevalence of these schemes. [This report was co-produced by the Institute on Taxation and Economic Policy (ITEP).]