Public Cost of Tuition Tax Credits.

Publications, Institute for Research on Educational Finance and Governance, School of Education, CERAS Building, Stanford University, Stanford, CA 94305 ($1.00).

N

33

National Inst. of Education (ED), Washington, DC.

OB-NIE-G-80-0111

IFG-TTC-10

Budgeting; Cost Estimates; Educational Finance; Elementary Secondary Education; Enrollment Projections; Family Income; Federal Government; Government School Relationship; Postsecondary Education; Private Education; Private Schools; School Choice; Tax Credits; Tuition

As interest in tuition tax credits has increased, one of the central issues has become the likely loss (or cost) that would result from adopting such a plan. In this paper the author first analyzes the likely independent effects of changes in the four major characteristics of tax credits (scope of eligibility, maximum amount, proportion of costs covered, and refundability) on federal revenue loss, assuming no change in either enrollments or tuitions. First, each characteristic would affect the amounts of credits that families would receive and thus would affect overall federal revenues. Second, by altering the price of education to students, tuition tax credits could affect the behavior of both families and schools. The last section of the paper examines how characteristics of tuition tax credits, both independently and interacting with each other, would affect enrollment patterns and tuition costs and consequently federal revenues. A table summarizes how the characteristics of tax credits would affect who benefits, by how much, and what the result is in foregone tax revenues. (Author/MLF)

1983

ED224158