Here's one where I'll probably be feeding the STACLU crowd, since I don't think they've said anything about this case. The ACLU is filing a suit in Arizona to stop a new state law that provides a tax credit for companies who contribute to a fund for tuition grants for low income students to attend private schools. I strongly disagree with their rationale.
The centerpiece of school-choice advocates' legislative agenda during the 2006 session, the tax break provides companies with a dollar-for-dollar income tax savings for the amount of qualifying donations to groups that provide low-income students with grants for private school tuition...
Critics contend the tax credit diverts tax dollars from the public school system and that it violates state constitutional provisions prohibiting public funding for religious schools and mandating that the state provide a general and uniform public school system.
But they are wrong and I doubt this case will succeed in court either on the state or Federal level. At the state level, as the article points out, the State Supreme Court already upheld a similar law that provides a tax break to individuals who donate to the tuition program (which is private, by the way, not public). On the Federal level, the Supreme Court ruled in Zelman v Simmons-Harris that even a direct government subsidy for tuition that ends up going to a religious school does not violate the establishment clause.
The legal theory behind such suits is highly flawed. There has to be a distinction made between direct subsidies to relgiious schools (which are unconstitutional) and a benefit given to individual parents and families that they use in the manner they think is best. Chief Justice Rehnquist's opinion in Zelman says:
This Court's jurisprudence makes clear that a government aid program is not readily subject to challenge under the Establishment Clause if it is neutral with respect to religion and provides assistance directly to a broad class of citizens who, in turn, direct government aid to religious schools wholly as a result of their own genuine and independent private choice. See, e.g., Mueller v. Allen, 463 U. S. 388. Under such a program, government aid reaches religious institutions only by way of the deliberate choices of numerous individual recipients. The incidental advancement of a religious mission, or the perceived endorsement of a religious message, is reasonably attributable to the individual aid recipients not the government, whose role ends with the disbursement of benefits.
And they are right. Under the legal argument used against such indirect aid cases, it would be unconstitutional to give food stamps to someone if they ended up using that movie for some religious purpose, like making a dish for a church potluck or making a seder meal for passover. It would also be unconstitutional for police and fire departments to respond to calls at churches because doing so would "aid religion." This is a position that really can't be taken seriously.
And how much more tenuous is the argument in this case, where the government isn't even giving money but merely providing tax breaks for private groups to do so? The decision to use a tuition grant at a religious school is not made by the government, nor is the tuition grant made up of public money. It is made by the individual parent or family and the grant is private money. The government clearly has a secular interest in providing opportunities for kids to have the best education possible, and here they are doing it without using any public money and without regard to whether those opportunities are provided by a religious or non-religious school. The ACLU is wrong here, and they have little chance of winning the case.
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It is, of course, tax deductible (to an extent) for corporations to give money directly to religious charities such as food banks and homeless shelters. So to argue that doing so indirectly is verboten is just plain weird.
The larger argument the ACLU would like to make is that this is an attempt to undermine the public education system. Perhaps it is. But policies have to be assessed on their own merits, not that of some putative agenda. And giving some poor children a chance to (possibly) get a better education at a private school does not sound like inherently bad policy.
so its a matter of if the government gives the breaks to anybody who donates to a religious school, it's fine, but if the government perhaps made an exception to a muslim or jewish private school THAT would be wrong because it would be selectively applying a preference of religion and thus promoting christianity over those other religions.
i can see that point.
The merits of case seem to be that the ACLU is not going to win the case, but I happen to agree with their position about the tax breaks, just not their rationale for opposing them. I think public education is a bedrock principle of this country and any attempts to usurp money away from it is flawed. We don't allow people to not pay taxes for the military if they are against a war do we? Allowing people to not share the burden for public education is tantomount to saying that we are indifferent whether the pay their just portion or not. Given the contempt for public education among the right it is no wonder where this attitude would come from. I guess the consilation is that once their kids graduate they get to pay their taxes to support public education like the rest of us.
This is entirely not a constituional argument and as such ais the kind of policy decision that needs to be made at the legislative level. THe ACLU should lose based on the merits of the case, but that doesn't mean their wrong.
Russell Claus writes:
Of course it does. The case doesn't claim that the program is bad public policy, it claims that the program is unconstitutional. Hence, they are wrong.
Fine. They're wrong. But they're wrong for the right reasons. The day I don't have to pay taxes for unconstitutional invasions of sovreign nations is the day the religious kooks get to duck out on public education. Fair's fair, buckos.
'And giving some poor children a chance to (possibly) get a better education at a private school does not sound like inherently bad policy.'
I doubt seriously if many get a better education at the majority of private schools. In our area they are the dumping ground for kids that can't cut it in the PS. The kids who go the reverse often trail the PS kids significantly. Of course schools and areas vary.
Russel said
Allowing people to not share the burden for public education is tantomount to saying that we are indifferent whether the pay their just portion or not.
I don't see them allowing parents to opt out of paying their part in property taxes that directly fund the public schools. They are simply giving tax breaks to companies that help fund scholership programs for private schools. The only impact on public school funding would be the loss of funds for the students who are subsequently able to go to a private school. While I am a huge supporter of public education, calling this bad public policy is not dissimilar to saying that allowing tax breaks for any charitable donation is also bad public policy.
Regarding the topic of public education, I found some very convincing arguments against public education at freedomofeducation.net. You might want to take a look.
Jeez...I went to a private college.
I got tax breaks for my tuition and student loan interest.
Is the ACLU going to sue the government over these breaks next?
Steven I went and looked at your link. Some decent arguments but none that I would find convincing. Nor did I see many viable alternatives.
A couple of points.
One, I'm not sure that I would rely on a newspaper report regarding the ACLU's legal rationale in bringing the suit. Since the tax benefit is a credit, not a deduction, a company (BTW, the credit is not allowed to individuals?) would be able to get a dollar-for-dollar reduction in its state income tax obligation, and so the state--by the tax reduction--would essentially be funding the entirety of the contribution. On the other hand, if the tax benefit were just a deduction, the benefit to the company (and the reduction of the tax revenue to the state) would merely be the amount of the contribution multiplied by applicable tax rate, which would provide a much lower tax benefit to the company.
The objection is this. If the company gets the dollar-for-doallar reduction in its state income tax obligation, if a tax benefit in this manner were to be allowed, the state government would essentially be funding programs that it is prohibited from funding directly. If, as noted in the article, the state constitution prohibits public funding for religious schools, this tax credit would essentially be an "end run" around that prohibition. If this tax credit program were allowed to go forward, it would also permit the state (not just Arizona, but any state, or the federal government) to allow similar tax credits for any program that any state (or the federal government) may be prohibited from doing on its own, but which could be handled by a private party (a charity, or some such). In essence, the state government, by the dollar-for-dollar reduction in income tax obligation would be funding the program, but, with a wink-and-a-not, it would be carried out by a third party that receives the contributions.
An income tax deduction for charitable contributions--which these types of contributions are--is probably already available to companies and to individuals, and should be allowed as with any other types of charitable contributions.
Two, it is unclear how Zelman fits into the mix. That was a case involving the federal constitution, not a state constitution. This case would involve the Arizona state constitution.
@ raj: But they're not funding religious schools. They're funding students, who may then choose to spend the money - which is now their money, not the government's money - on religious 'education.'
Now, I happen to think that a provision that gives this kind of tax credit is going to be used by companies to move funny-money around in slush funds in ways that'll exempt them from taxation without providing real aid for real people in the real world. But the potential for tax loopholes just makes it bad policy, it doesn't make it illegal.
- JS
raj-
First, yes individuals do get the same tax credit that businesses get for donating to the tuition fund. That law was already on the books, and already upheld by the Arizona Supreme Court in a previous ACLU suit.
Second, the point about tax credit vs. tax deduction isn't relevant to the legal question. If it's unconstitutional for the government to fund the program through a tax mechanism, as you argue, then it's just as unconstitutional for them to fund 25% of it as it is to fund 100% of it. So while that's an interesting policy consideration, it's an irrelevant constitutional one.
Third, if we're going to declare that tax breaks to encourage private giving are the same thing as direct government funding, as you suggest, then that makes the entire system of tax breaks unconstitutional. You get a tax break every time you donate to any non-profit organization, including religious ones. And if we're going to argue that a benefit given to individuals that they choose to use for some religious purpose is tantamount to direct funding by the government, it would also, as I said, make it illegal for someone to use food stamps for a seder meal or to give a tithe out of their welfare check (or possibly even out of their social security check). This legal argument simply can't be applied consistently.
This case is being argued on both Federal and state constitutional grounds, but both levels have already ruled on the issue. The Arizona ACLU has in fact already lost in state courts twice on this very issue, and of course there is Zelman at the Federal level. They're going to lose. And they should.
Ed,
Since you mention it, yea I think the whole idea of tax breaks for donating money is asinine. I don't know how many non-profits trumpet the fact that donations to them are tax-deductable. If that's the main reason people donate, what does that say about our convictions?
Russell-
But asinine != unconstitutional.
tax breaks = more power on where your money goes.
Not assinine in my book.
And tax breaks is more of a third level, reason, anyway, after people decide they like the group and decide they want to give.
"Since the tax benefit is a credit, not a deduction, a company (BTW, the credit is not allowed to individuals?) would be able to get a dollar-for-dollar reduction in its state income tax obligation, and so the state--by the tax reduction--would essentially be funding the entirety of the contribution."
How so? There is no cash flow from the state to the company, only a reduced cash flow from the company to the state. The only difference between a credit and a deduction is the percentage of reduction of tax per dollar spent by the taxpayer on the item that results in the credit or deduction (I don't believe this works as a refundable credit, where you would receive money if your credits exceed your tax liability).
In response to your parenthetical question, there is an existing tax credit for individual donations to school tuition organizations, which has already successfully withstood two legal challenges from the ACLU of Arizona. I see no reason to believe that the corporate tax credit will not also survive legal challenge. I just got a call a few minutes ago from an ACLU Arizona board member asking for my financial support, and I told her I'm not giving money to them because of this lawsuit, which I see as misguided and a waste of their funds.