The GOP House Budget Bill Also Takes Aim at Public Education with Its Private School Voucher Scheme
From Bucks County Beacon
The GOP’s Trump-backed “big, beautiful bill” has passed out of the House of Representatives, and taxpayers are rightfully giving lots of attention to features like the slashing of Medicaid and tax cuts for the wealthy. But buried within the bill is language that would create federal education private school vouchers and provide a tax dodge for the wealthy while eroding the public school system in favor of taxpayer-subsidized discrimination.
This federal school voucher bill was previously known as the Education Choice for Children Act, but now appears in the Big Beautiful Bill as Section 110109 “Tax Credit for Contributions of Individuals to Scholarship Organizations.” That’s not under the sub-heading of Education and the Workforce but instead under “Additional tax relief for American families and workers.”
The name change could simply represent the legislation’s real priority — tax avoidance rather than improving education. It may also reflect the political reality of school vouchers, which, as journalist Jennifer Berkshire notes, are neither populist nor popular with Trump’s own voters.
The voucher tax credit certainly favors the wealthy.
Individuals can contribute up to 10 percent of their income to scholarship grant organization that would administer and distribute school vouchers. Donors would receive a dollar for dollar tax credit, first come, first served, until the $5 billion total cap is reached. That cap represents a cost to US taxpayers of $5 billion.
Because the bill allows contributions of “cash or marketable securities,” donors could actually profit, according to analysis by the Institute on Taxation and Economic Policy. Here’s how it would work. The contributor bought stock for $2,000. At the time they donate the stock, it is worth, say, $10,000. The contributor would get a $10,000 tax credit, but would not be required to pay any tax on the $8,000 gains.
For example, ITEP estimates that Pennsylvania’s wealthiest man and enthusiastic school voucher supporter Jeffrey Yass could get an almost $150 million tax credit that would include a $13 million profit in avoided capital gains taxes.