Tuesday, March 7, 2017

Some Tax Credit Scholarships Have A Loophole For Wealthy Donors : NPR Ed : NPR

Some Tax Credit Scholarships Have A Loophole For Wealthy Donors : NPR Ed : NPR:

'Tax Credit Scholarships,' Praised By Trump, Turn Profits For Some Donors


President Trump has indicated several times now that his education agenda may feature a school choice program known as tax credit scholarships. He called it out in his first joint address to Congress last week, and followed that up with his first school visit as president this weekend: to a Catholic school in Florida which accepts several hundred students on the scholarships.
In these programs, sometimes called "neovouchers," people and companies earn tax credits by giving money to nonprofit scholarship funds. Students can use the scholarships to attend private schools, including religious schools. This is important because traditional school vouchers can run afoul of constitutional challenges if they allocate public money to religiously based organizations.
These programs have been growing quickly in the last few years, with a push by groups like the American Federation for Children and the American Legislative Exchange Council. They exist in 17 states and several more are currently considering them.
But as documented by Carl Davis of the Institute on Taxation & Economic Policy, and as advertised by financial advisors and the scholarship organizations themselves, in 10 of these states there is a quirk that allows individuals to turn a profit on their donations.



Here's how it works: Donors to these scholarship funds can offset their state tax liability by 70 to 100 cents for every dollar given. That's already generous compared Some Tax Credit Scholarships Have A Loophole For Wealthy Donors : NPR Ed : NPR:

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