tax credits for homeschooling: initial thoughts

As I wrote recently, I’m currently in an ed policy class and doing my first real series of policy docs. After much deliberation, I have decided to analyze the prospect of NYC providing tax credits (or some other form of compensation) to families who homeschool their children. Although, to my knowledge, there is no serious proposal to enact such a thing on the state or city level here, tax credits for homeschoolers has gotten significant national attention lately. In particular, this recent New York Times Room for Debate essay collection laid out a wide range of possible positions on the issue, taken by a variety of relatively important players in the field. I think I’m going to come out against the tax credits.

Right off the bat, let me say that I’m not interested in rejecting the tax credits on the grounds that they will be the first step on a slippery slope to the excessive regulation of homeschooling. It’s true that that could happen. However, it’s more of a self-interested reason for homeschoolers not to demand or accept the credits, not exactly a moral or political one. Possibly, offering or even obliging homeschoolers to take the credits in exchange for more regulation is the all-things-considered best policy, from a moral and political perspective.

One recurring argument for homeschooling tax credits (and also for school choice policies like tuition vouchers) is that the credits are simply a way of “returning” a taxpayer’s own dollars to her. This may be a persuasive argument, but I find it totally disingenuous. If we took seriously the idea that the amount of education your family can consume should track exactly how much you’ve spent in taxes, then there wouldn’t really be any point in collecting the taxes in the first place, and that would take education largely out of the public sphere. Now, advocating for the reprivatization of education is a legitimate position to take, and there are reasons to think that education is in large part a private good (especially at the higher grades). Economists study this in a methodical, empirical way, and they disagree. But the appropriate way to challenge our nation’s fundamental concept of what education is, and should be, is not by making such a misleading statement as to the function taxes presently serve.

Another perhaps slightly more sophisticated argument for the credits could go as follows: The government has committed to providing instruction for all children; to this end it employs teachers. If you don’t send your children to public school, then they are not consuming any teacher resources purchased by the government. In effect, the parent is the teacher, and thus stands to receive compensation instead of of a state-employed teacher.

Let’s ignore the fact that homeschooling parents aren’t certified as teachers, because I’m skeptical about the value of certification. Even still, this isn’t so much a moral argument, or about desert, as it is a straightforward empirical claim. The argument’s force depends on it being true that the government saves on teacher compensation when you take your child out of public school. Because homeschooling is not very popular, and the tax credits probably wouldn’t be large enough to induce many more families to homeschool, it could be the case that school districts save little or no money at all. Although statistics about dollars spent per student in a school district seem high (in the neighborhood of $10k/student, in many places), the marginal cost for educating one more student may be very low. As such, the school district wouldn’t save much by you declining to enroll your kid in the public school, and it would not be revenue neutral for the government to give you a tax credit.

And anyway, if what we’re concerned with is a discrepancy between your tax dollars paid and what educational services you have received, then we’re just back to the general criticism that education is not a public good again. And that is an argument that should be made openly, so as to be consistent with regards to other parties (e.g., very large families, childless couples) who consume more or less education than they receive.

Stay tuned for further developments on this project.


  • The last paragraph, I think, is critical for a couple of reasons. First off, in any given year that your child attends a school they are almost universally receiving substantially more tax dollars than your family puts in. That’s because of childless couples, the elderly, commercial property taxes, etc. One might think, then, that the incentive is to live somewhere with strong investment in education while you have children of school age and move to areas with low education investment afterwards. And to some extent that is true and people do this.

    However, there is another critical benefit (that may be considered an externality) that folks gain by having their tax dollars go to education. Because of the strong preference for the vast majority of folks to have public education options, the quality of schools has a substantial effect on home prices. Your investment into public education, even if you don’t directly utilizes, pays back in higher home values. Some of this takes as a given that education is a public good but look no further than 25 miles or so west to Nassau County for a perfect example of Tiebout sorting and the capitalization of school quality into home values.

    I guess I write all that to say that there are significant benefits to having a strong public school system that extend beyond the direct benefits of having your children attend those schools that are subject to market valuations through property sales. Given this reality, it’s even more unfair to make the claim that school taxes are acting as a tuition, rather they’re part of sustaining a larger ecosystem of public goods that property purchasers value. Not only do we have the option to select a bundle of public goods when purchasing homes but we have the additional option of exercising voting rights to change or further assert our preferences for a particular level of goods.

  • pamela wrote:

    Thanks, Jason, I think you’re basically right, although I am probably more skeptical about the “addi­tional option of exer­cis­ing vot­ing rights to change or fur­ther assert our pref­er­ences for a par­tic­u­lar level of goods” than you are. For this and other reasons, I am fairly supportive of some types of school choice programs, which help to sever the tie between the location of someone’s home and the school they attend. But anyway it remains misleading to speak of tax credits as “return” of tax dollars, even under conditions of school choice.

    And I really need to revisit the arguments against public education’s being a public good made by EG West, and some other things from economics of ed last semester. But if I recall even Milton Friedman thought that at least primary education served the public good.

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