Abstract
Some politicians believe that market-based approaches to education will meaningfully reshape public education in the United States. Advocates of school choice insist that competition for students will improve academic outcomes, drive innovation and improvement, and reduce political interference in the education system. Critics believe that there is little empirical support for any of these claims and fear that school choice policies worsen the problem of educational inequality. Although consumer choice is appealing, making an informed choice requires parents to navigate complicated application processes and transportation requirements, which may prove insurmountable to low-income families. The net effect of this is that the poorest and most vulnerable children are left behind.
The purpose of this Essay is not to rehash the topic of school choice, which has been exhaustively considered and debated by academia, think tanks, media sources, and the government. This is a thought piece intended to shine a light upon the problematic use of the Internal Revenue Code (Code) to support state and local school choice policy, or more specifically, a tax expenditure—the merits of which have not been exhaustively considered and debated. Part I covers an overview of § 529 qualified tuition programs (529 Plans), with attention to the 2018 change to the § 529 structure slipped into the Tax Cuts and Jobs Act (TCJA) that has essentially turned 529 Plans into a government-subsidized school voucher scheme for the wealthy. Part III considers the problems inherent to subsidizing school choice through the federal tax system.