THE EFTC: HOW THE MAGA BILLIONAIRE CLASS BOUGHT THEMSELVES A "CHARITY" AND CALLED IT EDUCATION REFORM
A sick, sharp, and thoroughly documented guide to the federal voucher scheme that's quietly picking your pocket while telling you it's saving your kids
Here's a fun game: take $26 billion in federal tax revenue, hand it to a network of private nonprofits with minimal oversight, let wealthy families use it to pay for schools that can teach whatever they want, and call the whole thing Educational Freedom. If that sounds less like a policy and more like a heist with a press release, congratulations — you've just understood the federal Education Freedom Tax Credit (EFTC), the crown jewel of the MAGA school choice movement and the most elegantly dressed wealth transfer since trickle-down economics wore a tuxedo.
The program launches January 1, 2027. The public comment window closes December 1, 2026. The No Kings Day of Action is this Saturday, October 17, 2026. The timing, as they say, is not a coincidence.
The Mechanics: A Dollar-for-Dollar Gift to the Already Comfortable
Let's start with the architecture, because the devil here isn't just in the details — he's load-bearing.
The EFTC, enacted under Section 25F of the federal tax code, works like this:
- You donate cash to an approved Scholarship Granting Organization (SGO) — a private nonprofit.
- You get a dollar-for-dollar federal tax credit: up to $1,700 for individuals, $3,400 for married couples filing jointly.
- The SGO distributes "scholarships" to families for private school tuition, homeschooling supplies, tutoring, and more.
- By 2030, the Treasury projects 11 million taxpayers will contribute up to $26 billion annually, funding roughly 2.2 million scholarships per year.
Sounds generous, right? Here's the catch hiding in the fine print, wearing a blazer and sipping Perrier:
The income ceiling to qualify for a scholarship is 300% of the Area Median Gross Income.
In a metro area where median family income is $90,000, households earning up to $270,000 are fully eligible. Policy researchers estimate this covers approximately 96% of all K–12 students in participating states. That's not a safety net. That's a trampoline for people who already own the house.
The "Welfare for the Wealthy" Playbook
"It's not a voucher!" — People who designed a voucher.
The architects of the EFTC learned a lesson from the political graveyard of failed voucher referendums: Americans don't like vouchers. They've voted them down in state after state. So the MAGA policy machine, generously funded by billionaire think tanks like the Heritage Foundation and the American Federation for Children (founded by none other than Betsy DeVos, who apparently couldn't find enough to do dismantling the Department of Education from the inside), rebranded the concept.
Instead of "voucher," it's a "tax credit." Instead of "government spending," it's "private philanthropy." Instead of "defunding public schools," it's "educational freedom."
The Supreme Court, in Arizona Christian School Tuition Organization v. Winn (2011), helpfully ruled that because the money technically passes through a private donor's hands before landing at a private school, it's not really public money. It's a neat trick — like saying a river isn't public water because it briefly flows through your garden hose.
The practical result? $26 billion annually exits the federal revenue base — money that would otherwise fund Title I grants for low-income public schools (currently budgeted at $18.4 billion for FY2026) — and flows into a network of private organizations with varying degrees of accountability, some of which can teach that dinosaurs and humans coexisted, that climate change is a hoax, or that certain students are spiritually inferior. All tax-credited. All perfectly legal under Carson v. Makin (2022), which ruled that states can't even require the instruction to be secular.
The Governors: Heroes, Pragmatists, and the Ones Who Cashed In
The Line-Holders 🛡️
Some Democratic governors looked at this scheme and said, clearly and without ambiguity: No.
- Gov. Tony Evers (Wisconsin) vetoed the opt-in bill, correctly noting that participating "siphons public focus and financial support away from traditional K–12 public schools."
- Gov. Katie Hobbs (Arizona) — governing a state that has already lived through the disaster of universal vouchers draining $900 million from public schools — vetoed the legislation, arguing it "undermines accountability standards and drains revenue."
- Gov. Tim Walz (Minnesota) and Gov. Tina Kotek (Oregon) formally declined, citing the disproportionate benefit to higher-income households and the weakening of the federal tax base.
- Gov. Michelle Lujan Grisham (New Mexico) refused, citing a lack of fiscal transparency and regulatory oversight for SGOs — which is a polite way of saying "we're not handing $26 billion to organizations we can't audit."
These governors deserve credit — and votes — for holding a line that is genuinely difficult to hold when the other side has unlimited dark money, a Supreme Court majority, and the rhetorical high ground of "helping children."
The Override Victims 😤
In North Carolina, Kansas, and Kentucky, Democratic governors vetoed opt-in bills only to have Republican-controlled legislatures override those vetoes. This is democracy working exactly as the billionaire donor class designed it to: fund the state legislature, override the governor, claim a mandate.
The Pragmatic Capitulators 🤔
Gov. Jared Polis (Colorado) — a Democrat and libertarian-leaning school choice advocate — opted in, arguing that Colorado taxpayers would donate to SGOs anyway, and refusing to participate would just send those tax-credited dollars to fund private schools in Texas instead of Colorado. It's a coherent argument. It's also the same logic that gets used to justify every incremental surrender to a bad policy: if we don't do it, someone worse will.
And then there's Gov. Kathy Hochul (New York), who announced New York's opt-in as the 31st state to join, making her the most prominent blue-state governor to embrace the program. Her rationale — "I'm not going to leave money on the table when it could help our kids" — is the kind of statement that sounds reasonable until you realize the table was built by people who want to burn down the public school cafeteria.
New York's opt-in opens access to EFTC scholarships for up to 2.7 million K–12 students. The New York State United Teachers (NYSUT) was not amused. The Catholic bishops were thrilled. Draw your own conclusions about whose constituency is being served.
What's Actually Wrong With This Program: The Unvarnished Version
1. It's a Reverse Robin Hood
The EFTC is projected to cost $26 billion annually by 2030 — eclipsing the entire Title I budget for low-income public schools. Unlike Title I, which is means-tested and targeted, the EFTC's 300% AMGI ceiling means the overwhelming majority of scholarship dollars will flow to families who were already paying private school tuition. Empirical data from similar universal programs in Arizona, Florida, and Ohio consistently shows that early adopters are disproportionately families already enrolled in private schools — not low-income families escaping failing districts.
The wealthy get reimbursed. The public schools lose enrollment-based funding. The fixed costs — the buses, the buildings, the administrators, the special education staff — remain. The math does not improve.
2. The "Private Money" Fiction
The Supreme Court's ruling in Arizona Christian that tax credits aren't public money is legally clever and economically absurd. A dollar-for-dollar tax credit is a dollar the federal government chose not to collect. Whether that dollar passes through a donor's checkbook on its way to a private school is a distinction without a practical difference. The Treasury still loses the revenue. The public school still loses the student. The private school still gets the money. Calling it "private philanthropy" is like calling a government subsidy a "market outcome."
3. The Accountability Vacuum
Public schools are required to administer standardized tests, maintain civil rights compliance, employ certified teachers, publish financial disclosures, and answer to elected school boards. Private schools receiving EFTC scholarships face none of these requirements under federal law. The proposed IRS regulations actually prohibit states from imposing stricter standards on SGOs or participating schools than the federal statute requires. A state that wants to mandate, say, that schools receiving tax-credited scholarship dollars not discriminate against LGBTQ+ students can be preempted by federal regulation. The billionaires didn't just buy the policy — they bought the referee.
4. The Religious Instruction Loophole
Carson v. Makin (2022) closed the last door on requiring secular instruction. EFTC scholarship dollars can now fund schools that integrate religious doctrine into every subject — not just theology class, but science, history, and civics. States cannot exclude these schools without violating the Free Exercise Clause. This is not a hypothetical concern: it is the explicit, stated goal of the Christian nationalist wing of the school choice movement, which has been remarkably candid about wanting to use public-adjacent funding to build a parallel educational infrastructure rooted in religious conservatism.
5. The SGO Wild West
Scholarship Granting Organizations are private nonprofits. The anti-earmarking rules are real and meaningful — donors cannot fund their own children's tuition through a wink-and-nod SGO arrangement. But the rules governing which students SGOs prioritize, which schools they approve, and what expenses they cover leave enormous discretion to private organizations that are not democratically accountable, not subject to FOIA requests, and not required to publish their scholarship criteria in any meaningful public forum. The 90% distribution rule sounds robust until you realize that 10% of $26 billion in administrative overhead is $2.6 billion annually flowing to nonprofit executives and operations — with no public salary caps.
The Legal Battlefield: Where This Gets Interesting
State Attorneys General are not sitting quietly. Multi-state legal challenges are targeting the EFTC on four fronts:
Tenth Amendment / Anti-Commandeering: Forcing state revenue agencies to audit and certify SGO lists may constitute unconstitutional commandeering of state administrative resources under Printz v. United States.
APA Challenges: The Treasury's prohibition on states imposing stricter civil rights or quality standards on SGOs arguably exceeds the agency's statutory authority — a particularly potent argument in the post-Chevron deference landscape where courts are increasingly skeptical of expansive agency rulemaking.
Separation of Powers: In states where governors opted in without legislative authorization, lawsuits argue the opt-in letters are constitutionally void — the "Power of the Purse" belongs to the legislature, not the executive.
Revenue Clause Challenges: Non-participating states argue their taxpayers are doubly harmed — they lose federal education grant revenue and can't access the tax credit benefits. That geographic disparity may constitute an arbitrary, unconstitutional burden.
The public comment deadline is December 1, 2026. The IRS public hearing is December 15, 2026. The program launches January 1, 2027. The litigation will outlast all of it — but comments matter, governors matter, and state legislatures matter enormously in determining how this plays out on the ground.
Remember in November — and Show Up This Saturday
Here's the thing about a $26 billion annual tax expenditure designed to defund public education while reimbursing wealthy families for private school tuition: it requires elected officials to make it happen. Governors opt in. Legislatures authorize. State agencies certify. School boards lose funding. Teachers get laid off. Kids in underfunded public schools lose resources.
Every single one of those officials is elected. Every single one of them can be replaced.
This Saturday, October 17, 2026, the No Kings: Vote Early Day of Action is happening nationwide — organized by a coalition that includes Public Citizen, Indivisible, the ACLU, and the American Federation of Teachers. The mission is simple:
| 📋 Action | 🔗 Resource |
|---|---|
| Check your voter registration | CanIVote.org or your state's Secretary of State portal |
| Find your local event | nokings.org — Event Map & Voter Resource Guide |
| Mobilize your community | indivisible.org — Midterm mobilization tools |
| Know your voting rights | aclu.org — 2026 midterm voter guidance |
| Education advocacy resources | aft.org — Democracy Defenders campaign |
| Democracy protection | citizen.org — Anti-Citizens United advocacy |
The Bottom Line
The EFTC is not an education program. It is a wealth transfer mechanism dressed in the language of parental empowerment, engineered by billionaire-funded think tanks, protected by a Supreme Court majority built over decades of strategic judicial appointments, and now being implemented through a combination of gubernatorial opt-ins, legislative overrides, and regulatory preemption that systematically strips states of the ability to protect their own public school systems.
The governors holding the line — Evers, Hobbs, Walz, Kotek, Lujan Grisham — are doing so against enormous political and financial pressure. The governors who capitulated — including some Democrats who should know better — are providing bipartisan cover for a fundamentally anti-democratic redistribution of public resources.
The billionaires have their tools: LLCs, matching grants, think tanks, dark money PACs, and the patience of people who have never had to worry about their child's school losing its art teacher because enrollment dropped by forty students.
We have ours: the vote. It's blunt, it's collective, and — when enough people use it — it's the one instrument that no amount of venture philanthropy can fully neutralize.
Show up Saturday. Show up in November. Stand for public education.
Public comment on proposed Treasury/IRS Section 25F regulations closes December 1, 2026. Submit comments at regulations.gov. The IRS public hearing is scheduled for December 15, 2026. The program launches January 1, 2027. There is still time — but not much.
Sources & Links: The EFTC Article — Full Reference List
🏛️ Federal Government & Official Regulatory Sources
| # | Source | Description | Link |
|---|---|---|---|
| 1 | IRS Newsroom | Official IRS announcement on the EFTC / Section 25F launch and program mechanics | irs.gov |
| 2 | Federal Register | Full proposed Treasury/IRS regulations for Section 25F Federal Scholarship Tax Credit (Oct. 2, 2026) | federalregister.gov |
| 3 | U.S. Treasury | Treasury press release previewing EFTC guidance and 2027 launch framework | home.treasury.gov |
| 4 | U.S. Dept. of Education | Official EFTC Fact Sheet — program eligibility, SGO rules, state opt-in mechanics | ed.gov |
🗺️ State Participation Tracking
| # | Source | Description | Link |
|---|---|---|---|
| 5 | Ballotpedia | Comprehensive, continuously updated tracker of which states have opted in, opted out, or are pending — including governor actions and legislative overrides | ballotpedia.org |
| 6 | DFI Policy | Detailed state-by-state EFTC participation map with governor opt-in status and SGO certification timelines | dfipolicy.org |
🚶 No Kings: Vote Early — October 17, 2026 Day of Action
| # | Source | Description | Link |
|---|---|---|---|
| 7 | No Kings — Official Site | Main event hub: event map, local gatherings, voter resource guide, and coalition information | nokings.org |
| 8 | No Kings Resource Guide | Official community response guide for October 17 — voting early, de-escalation, nonpartisan participation tools | nokings.org/nkve-resources |
| 9 | Indivisible | Official Indivisible event listing for No Kings: Vote Early — October 17, 2026 | indivisible.org |
| 10 | Wikipedia | Overview of the October 2026 No Kings protests — background, coalition, and scope | wikipedia.org |
🗳️ Voter Resources & Coalition Organizations
| # | Source | Description | Link |
|---|---|---|---|
| 11 | Can I Vote | National voter registration checker — confirm your registration status before November | canivote.org |
| 12 | ACLU | Voting rights defense, 2026 midterm voter guidance, and election protection resources | aclu.org |
| 13 | American Federation of Teachers | Education advocacy, Democracy Defenders campaign, and public school mobilization resources | aft.org |
| 14 | Public Citizen | Democracy protection, anti-Citizens United advocacy, and campaign finance reform resources | citizen.org |
⚖️ Supreme Court Precedents Referenced
| # | Case | Year | Core Holding | Official Citation |
|---|---|---|---|---|
| 15 | Arizona Christian School Tuition Org. v. Winn | 2011 | Tax credits = private money; no Establishment Clause standing | 563 U.S. 125 (2011) |
| 16 | Espinoza v. Montana Dept. of Revenue | 2020 | States cannot exclude religious schools from tax-credit scholarship programs | 591 U.S. 464 (2020) |
| 17 | Carson v. Makin | 2022 | States cannot exclude schools based on religious use of funds | 596 U.S. 767 (2022) |
| 18 | Printz v. United States | 1997 | Anti-Commandeering doctrine — federal govt cannot conscript state officers | 521 U.S. 898 (1997) |
📅 Key Dates to Act On
| Date | Action |
|---|---|
| October 17, 2026 | No Kings: Vote Early — Day of Action nationwide |
| December 1, 2026 | Public comment deadline on proposed Treasury/IRS Section 25F regulations — regulations.gov |
| December 15, 2026 | IRS public hearing on final Section 25F rule revisions |
| January 1, 2027 | EFTC program officially launches |
| February 15, 2027 | State SGO certification list submission deadline to IRS |
All links verified as of October 15, 2026. Federal Register and Treasury proposed rules remain open for public comment through December 1, 2026 — your comment is part of the official administrative record and carries legal weight in any subsequent APA litigation.