Marco Rubio floats a federal tax credit scholarship
U.S. Senator Marco Rubio received a lot of attention for his speech this week at the Jack Kemp Foundation, mostly for his remarks on how government can play a role in revitalizing the middle class. In addition to more conventional Republican ideas for economic growth and job creation—lighter regulations, tax reform—Rubio outlined several strategies for education investment, some of which would complicate, rather than simplify, the federal tax code.
And that may not be a bad thing, especially if those ideas lead to more educational opportunities for households that cannot afford them otherwise. Consider one of the senator’s more controversial suggestions: a corporate federal tax credit scholarship, one that would help low-income students cover the cost of a K–12 private education. There were few details in Rubio’s brief remarks on this subject, but we have examples in more than a dozen states to show how this might work.
The largest of these is in the senator’s home state of Florida: Corporations with a tax liability in the Sunshine State can receive a dollar-for-dollar tax credit by donating to a nonprofit scholarship organization. And that organization, in turn, awards scholarships worth up to $4,335 to children who qualify for a free or reduced-price lunch. There are nearly 50,000 K–12 students in Florida who now participate in the program, up from 29,000 just three years ago.
Despite its popularity, however, there is a reason that a program like this is controversial: A tax credit scholarship is tantamount to a voucher. This would seem to darken the prospects for a federal initiative, considering the hostility the White House and Senate Democrats have shown towards one of the smallest private-school choice program in the United States—the D.C. Opportunity Scholarship. But can a smartly designed corporate tax credit overcome not only the objections from more recalcitrant Democrats but a presidential veto as well?
Perhaps. Consider that nearly half the Democrats in the Florida House and a majority of the Legislative Black Caucus now support the Florida Tax Credit Scholarship (full disclosure: Between 2009 and 2011, I worked for the nonprofit that administers the Florida program). That wasn’t always the case, but more Democrats warmed to the program once they learned that it ended up serving the poorest and poorest-performing children in the state and once the program grew more accountable to taxpayers.
Moreover, the Florida effort has stayed focused on impoverished households whereas sizable tax-credit programs in Georgia and Arizona have stirred hostility among Democrats for providing aid to middle-class students who were already in private schools.
Not all Democrats, of course, would sign on to a well-designed tax-credit program focused on the poorest of the poor. And more than a few Republicans might object to using the federal tax code to accomplish what already is taking place in more than a dozen states. But, done right, this could be a federal school-choice initiative that can supplement—and maybe surpass—efforts in states that keep the value of similar scholarships artificially low by politics.
All of this, of course, may be getting ahead of Rubio’s ambitions. But if the senator is serious about rewarding “investment in education” the way we reward businesses for investing in equipment, then there are models to which he can turn to help bridge the typical Republican-Democratic chasm and, in doing so, benefit kids.
Category: Charters & Choice
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About the Editor
Director, Program on Parental Choice
Adam Emerson is the Thomas B. Fordham Institute’s school choice czar, directing the Institute’s policy program on parental choice and editing the Choice Words blog. He coordinates the Institute’s school choice-related research projects, policy analyses and commentaries on issues that include charter schools and public school choice along with school vouchers, homeschooling and digital learning.
May 16, 2013
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