How the Wealthy Scam the Government by Donating to Tax Credit Schemes

Diane Ravitch's blog

Carl Davis writes in “The American Prospect” that tax credits for private scholarships have become a scheme for money-laundering to benefit the wealthy.

“Some states, in their zeal to subsidize private schools, have created an egregious tax scam that allows wealthy taxpayers to profit by donating to private school scholarship funds in return for lucrative tax credits.

“Many states have constitutional provisions that expressly prohibit the use of public dollars for private religious schools. To sidestep these prohibitions and public aversion to the practice, voucher proponents and their legislative allies in 17 states have created generous tax credits to encourage taxpayers to donate to private school scholarship funds.

“Critics who object that vouchers drain resources away from public schools would be doubly outraged if they knew how these vouchers were, in some cases, fleecing the public till.

“Neovouchers,” as these scholarship funds are often called, have received considerable attention as…

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