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Donating the Voucher: An Alternative Tax Treatment of Private School Enrollment
Andrew Samwick, Dartmouth College and NBER

Approximately 10 percent of school-age children in the United States are enrolled in private schools, relieving public school systems and the taxpayers who support them of the financial burden of the cost of their education. At present, the tax code does not allow families who provide this financial relief an income tax deduction, even though such relief is a gift to governments for exclusively public purposes and thus is analogous to a charitable donation. Using the public use microdata sample of the American Community Survey and the NBER Internet Taxsim calculator, Samwick shows that granting families who enroll their children in private schools an income tax deduction equal to the per-pupil expenditures in their public school district would have cost the federal government an average of $7.75 billion per year over the 2006-10. This is less than one percent of federal income tax revenues. Because private school enrollment, public school expenditures, and marginal tax rates all increase with taxpayer income, the dollar benefits of this change are positively related to income. At the margin, high-income taxpayers would receive about 35 cents in federal and state tax relief for each dollar of per-pupil expenditures foregone.

The Deterioration in the U.S. Fiscal Outlook
Jeffrey B. Liebman, Harvard University and NBER
Recent Marginal Labor Income Tax Rate Changes by Skill and Marital Status
Casey B. Mulligan, University of Chicago and NBER

Mulligan calculates monthly time series for the overall safety net's statutory marginal labor income tax rate as a function of skill and marital status. Marginal tax rates increased significantly for all groups between 2007 and 2009, and dramatically for unmarried household heads. The relationship between incentive changes and skill varies by marital status. Unemployment insurance and related expansions contribute to the patterns by skill, while food stamp expansions contribute to the patterns by marital status. Remarkably, group changes in hours worked per capita line up with the statutory measures of incentive changes.


This paper was distributed as Working Paper 18426, where an updated version may be available.

The Design of Fiscal Adjustments
Alberto F. Alesina, Harvard University
Silvia Ardagna, Goldman Sachs

Alesina and Ardagna offer three results in their paper. First, in line with the previous literature they confirm that fiscal adjustment based mostly on the spending side is less likely to be reversed. Second, spending based fiscal adjustments have caused smaller recessions than tax based fiscal adjustment. Finally, certain combinations of policies have made it possible for spending based fiscal adjustments to be associated with growth in the economy, even on impact rather than with a recession. Thus, expansionary fiscal adjustments are possible.


This paper was distributed as Working Paper 18423, where an updated version may be available.


Andrew Austin, Congressional Research Service
Daniel Bachman, IHS Global Insight
Ike Brannon, Capital Policy Analytics
David Brazell, Department of the Treasury
Benjamin Bridges, Social Security Administration
Nicholas Bull, Joint Committee on Taxation
Aaron Butz, Congressional Budget Office
Niraj Chokshi, New York Times
Adam Cole, Department of the Treasury
Nancy Cook, "Politico"
Tim Dowd, Joint Committee on Taxation
Tracy Foertsch, Department of the Treasury
David Fox, Government Accountability Office
Robert Gillette, Department of the Treasury
Bobby Hodges, Internal Revenue Service
Sarah Holden, Investment Company Institute
Janet Holtzblatt, Tax Policy Center
Laurence Jacobson, Office of Management and Budget
Scott Jaquette, Department of the Treasury
Craig Johnson, Department of the Treasury
Gene Kuehneman, Retired
Sally Kwak, Joint Committee on Taxation
Paul Landefeld, Joint Committee on Taxation
Allen Lerman, retired
Thornton Matheson, Consultant
Jamie McGuire, Joint Committee on Taxation
Thomas Miller, American Enterprise Institute
Shannon Mok, Congressional Budget Office
Anne Moore, Department of the Treasury
Rachel Moore, Joint Committee on Taxation
Athiphat Muthitacharoen, Chulalongkorn University
Edward Nannenhorn, Government Accountability Office
John Navratil, Joint Committee on Taxation
Daniel Newlon, American Economic Association
Ioana M. Petrescu, Harvard University
Neil Pinney, Government Accountability Office
Ronald Promboin, retired
Zachary Richards, Joint Committee on Taxation
Alan Rozzi, Government Accountability Office
Karl Russo, PricewaterhouseCoopers LLP
Danielle Sandler, U.S. Census Bureau
Jonathan Schwabish, Urban Institute
Molly Sherlock, Congressional Research Service
Thomas Short, Government Accountability Office
Joanna Stamatiades, Government Accountability Office
Anne Stevens, Government Accountability Office
Lori Stuntz, District Economics Group
Kathleen Toma, Joint Committee on Taxation
Shamik Trivedi, "Tax Notes"
Alan Viard, American Enterprise Institute
Jack Wang, Government Accountability Office
David Weiner, Congressional Budget Office
Elwood White, Government Accountability Office
Jim White, Government Accountability Office
Julie M. Whittaker, Congressional Research Service
James Wozny, Government Accountability Office
Alexander Yuskavage, Department of the Treasury

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