Hidden Taxes

Our representatives in Harrisburg are well known for passing sweeping education laws that leave local taxpayers holding the bill. The state’s charter school regulations, mandates for school bus transportation, and special education laws are just some of the high profile (and high sticker price) examples.

The Philadelphia Inquirer recently pointed out the Educational Improvement Tax Credit (EITC) program is another, less obvious example. The name makes it sound high-minded and positive, doesn’t it? After all, who wouldn’t be in favor of educational improvement! The reality, though, is that the EITC allows businesses to avoid state taxes by giving money instead to private schools, to the tune of $160 million last year alone. EITC is thus a hidden tax: That’s $160 million lost tax dollars that might be used to support public school costs that will– instead– fall on the backs of local taxpayers.

And guess what? The people who are supposed to be representing local taxpayers, including both Representatives Justin Simmons and Ryan McKenzie, are now sponsoring a new bill that will almost double the amount of taxes businesses can avoid by funneling money to private and religious schools instead. Wanna know who will be footing the bill to pay for this expanded EITC? Look in the mirror.

(PS: After originally posting this, someone helpfully pointed out that private foundations assisting public schools, including the East Penn Educational Foundation, also receive money from the EITC program. I’m glad to learn this, but it doesn’t change the essential point: EITC takes what are effectively public tax dollars and redirects them outside the control of the public, necessitating tax revenue from elsewhere to make up the difference to pay for core educational costs.)

Learn More

PA’s Secret School Tax is About to Get Raised Again
Passing the Buck (or, Yes! I’m a Patsy)

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