Tell Congress to Oppose the Educational Choice for Children Act!

Tell Congress to Oppose the Educational Choice for Children Act!

Humanists,

They’re at it again: the religious right has unveiled a bill that would completely overhaul the US tax system to send billions of taxpayer dollars to religious schools. We need to speak up NOW–we’re hearing from friends in Congress that there’s a good chance the majority will try to sneak this proposal into a larger legislative package.

As humanists, we know that school vouchers do a world of harm. The religious right says they promote “educational freedom,” but private school vouchers do not provide real freedom or choice to students and parents. The “choice” in voucher programs is given overwhelmingly to private schools, which can choose to legally discriminate against students for reasons including disability, sexual orientation and gender identity, religion, academic achievement, and economic status.

Private school voucher programs undermine our nation’s public schools by diverting desperately-needed resources away from the public school system to fund the education of a few, select students in private, often religious, schools. The Educational Choice for Children Act would incentivize charitable support for school voucher programs– like those that divert taxpayer dollars to private schools, by providing $10 billion in annual tax credits for individuals who donate to nonprofit organizations that give students education scholarships. You can read the bill here.

This legislation is not only unconstitutional, it would also establish new tax shelters that have no precedent in federal law. The ECCA would allow America’s wealthiest individuals to serve as middlemen, funnelling federal funds to private religious schools while completely avoiding capital gains taxes. At a cost of more than $130 million in lost tax revenue for the federal government over ten years, this program is unconstitutional AND irresponsible.

Urge Congress to strongly oppose this legislation.

An analysis by the Institute on Taxation and Economic Policy (ITEP) shows in alarming detail just how much private schools – not American students – would benefit from this bill.. First are the private schools, which would immediately benefit from a new nonprofit hierarchy that would place them at the top; the program incentivizes individuals to give to voucher programs over other nonprofits. Any financial advisor with fiduciary responsibilities would have an obligation to recommend to their clients that they direct their charitable giving to this specific program, and thus to the private schools who get to collect the dollars on the other side.

That brings us to the second beneficiary of this proposal: wealthy individuals in search of tax shelters. Accountants and advisors will be obligated to recommend to their clients that they give to organizations that dole out private school vouchers rather than other (more worthy) causes, because the bill carves out a 1-to-1 tax benefit: for every dollar you give, you get one back as a tax credit. That may not be immediately alarming to those of us who don’t live and breathe tax policy, but when you consider that the bill offers this lucrative return even on corporate stocks for which an individual would currently be required to pay capital gains taxes, it’s an astounding break from current law.

The experts at ITEP said it best, “This would allow wealthy ‘donors’ to turn a profit, at taxpayer expense, by acting as middlemen in steering federal funding into private K-12 schools. ECCA’s supporters appear to be counting on this tax shelter as a means of driving donor interest in the program even as vouchers remain unpopular with the public.”

Their analysis shows that if someone purchased stock for $6 million, and saw that stock grow $4 million in profit to be worth a total of $10 million, the profit would normally be taxed as long-term capital gains at a rate of 23.8% when sold–just shy of a million dollar tax bill. However, under ECCA, an accountant would simply recommend that the would-be donor give all $10 million of that stock to the voucher program. Doing so would provide that donor a $10 million tax credit, and the federal government never gets its share.

To drive the point home, ITEP applied ECCA’s formula to some of the wealthiest supporters of school privatization to show how much money we’re talking about. Betsy DeVos, for example, would have been able to claim a $11.2 million tax credit using this scheme alone. Elon Musk could turn a $2.7 million profit, and Jeffrey Yass could see an additional $13.3 million in profit–all tax free.

This is to say nothing of the impact of lost revenue for states that also rely on income taxes for revenue. Over 10 years, Alabama would lose $28.5 million, Georgia would lose $45.5 million, Pennsylvania would lose $33.5 million, and Virginia would lose $44.5 million, just to name a few examples.

We don’t normally go down rabbit holes on tax policy at the AHA, but this is important. As religious exemptions to basic health care, education, taxes, and labor laws continue to chip away at the wall between religion and government, this bill would be the equivalent of a stick (or 130 billion sticks) of dynamite. Using complicated tax policies to entice and appease the wealthiest Americans isn’t just a “benefit” or effect of this bill– it’s a strategy of a well-organized movement that is working to dismantle public secular education in America. And we need to treat it as such.

If parents want to send their kids to religious private school, that’s fine. But our tax dollars shouldn’t fund it, and giving to these programs shouldn’t come with multi-million dollar perks. Your elected officials should be committed to strongly opposing private school voucher programs, especially those structured as tuition tax credits. Take just one moment now to urge Congress to oppose the Educational Choice for Children Act.