The Lead

Agreeing with the Obama administration's solicitor general, the Supreme Court ruled Monday that taxpayers have no right to challenge a tax credit for violating the Establishment Clause. The high court split 5-4 along idealogical lines with conservatives in the majority.

A tax credit reduces your tax bill dollar for dollar. $500 in credits reduces your tax bill by $500, in turn reducing the state's tax revenue by the same amount.

NPR:

Justice Anthony Kennedy, writing for the five-justice majority, said that taxpayers may challenge a direct legislative appropriation for religious schools, but not a tax credit. He conceded that a tax credit and a direct government expenditure "may have similar economic consequences," but he said a tax credit is different because any injury to the disagreeing taxpayer is "speculative," and the money is directed by private individuals, not the state.
...
Arizona State University law professor Paul Bender, who represented the Arizona taxpayers, says the court's opinion defies reality. "The state has a budget deficit of a billion dollars, so when $100 million doesn't come into the Treasury, the rest of the state's taxpayers have to make up for that," he says. "The idea that [the tax credit] doesn't affect the rest of the state's taxpayers is just fantasy."

Wall Street Journal:

At issue was the taxpayer's standing to hold the government to its constitutional obligations. Normally, an individual can sue the government only by alleging a personal injury from its misconduct, not because he believes it simply is overstepping its authority.

But in 1968, the Supreme Court created an exception for religious subsidy cases, observing that otherwise it would be virtually impossible to enforce the Establishment Clause.

Writing for the majority, Justice Anthony Kennedy explained that the exception applied only to government appropriations intended to subsidize religion. "A dissenter whose tax dollars are 'extracted and spent' knows that he has in some small measure been made to contribute to an establishment [of religion] in violation of conscience," Justice Kennedy wrote. In contrast, a tax credit implicates funds never collected in the first place. "When the government declines to impose a tax," Justice Kennedy wrote, "there is no such connection between dissenting taxpayer and alleged establishment."

Emphasis added.

New York Times:

In her dissent in the case, Arizona Christian School Tuition Organization v. Winn, No. 09-987, Justice Kagan said the majority’s position was an elevation of form over substance. “Taxpayers experience the same injury for standing purposes,” she wrote, “whether government subsidization of religion takes the form of a cash grant or a tax measure.”

She offered examples. “Suppose a state desires to reward Jews — by, say, $500 per year — for their religious devotion,” she wrote. Would it matter to taxpayers offended by the practice whether the reward came in the form of a government stipend or a tax credit?

“Or assume,” she wrote, “a state wishes to subsidize the ownership of crucifixes” in one of three ways. It could purchase them in bulk and distribute them; it could reimburse buyers with a check; or it could pay with a tax credit.

“Now, really — do taxpayers have less reason to complain if the state selects the last of these three options?” Justice Kagan asked.

Yet those who want to not spend and yet support religious schools may also be relying on the illusion Kagan identifies. From the NPR report:

"It is mostly Republicans who support these aid-to-religion programs, and Republicans don't want to raise taxes to pay for vouchers," Laycock says. "But if they can do it through a tax credit, they can support religious schools and claim it's a tax cut all at the same time."

In it's amicus brief the Obama administration wrote,

Unlike the statute in Flast (and unlike the Virginia statute to which James Madison objected in his famous Memorial and Remonstrance Against Religious Assessments, Flast, 392 U.S. at 103), the Arizona statute at issue here does not make grants or disburse government funds, and it does not direct the transfer of government money to religious institutions. Rather, the statute merely provides a beneficial tax consequence for private citizens who donate their own funds to STOs of their own choosing. The money involved never enters the State’s treasury, and the portion of it that goes to religious institutions does so only due to the unfettered discretionary choices of private individuals.

Comments (8)

Agreeing with the Obama administration's solicitor general

:-0 ????

I heard this story yesterday, but not that the Obama Admin argued the line that the SCOTUS (conservative) majority endorsed!

I think this was a TERRIBLE decision. Under the fig leaf of a "tax credit", this is the same as a voucher: taking tax payer money, to give to school authorities for which we get NO VOTE. (Whatever happened to "No taxation w/o representation"?)

What's more, this will CRIPPLE (actually democratic!) public schools, as moneys are shifted, dollar for dollar, to private schools via this tax credit.

In short, this is exactly the sort of decision one would expect from the sliding-towards-theocracy/down-with-godless-public-schools! SCOTUS majority. It is NOT what I would expect from the Obama Admin. What were they thinking?!

JC Fisher

Posted by tgflux | April 5, 2011 1:32 PM

taking tax payer money, to give to school authorities for which we get NO VOTE

Regardless of the arguments for or against that decision, the "we don't get to vote on that" line is overused and doesn't hold up. We DO get a vote on all of these things: It's called an election. If your representative or senator (state or federal) votes against your wishes, you have a perfect right to vote him or her out of office.

Folks, this is a REPUBLIC, not a DEMOCRACY. We don't get to vote on each and every thing, just on the people who do. You get who you (and a majority of your neighbors) vote for.

Posted by Tom Sramek, Jr. | April 5, 2011 1:42 PM

@JCFisher - I, too, was surprised. It's mentioned in the WSJ link, and I've now added to this post a link and snippet from the Solicitor General's brief.

Posted by John B. Chilton | April 5, 2011 2:30 PM

@ Tom Sramek: Amen, well said.

Jim McFerrin

Posted by Jim McFerrin | April 5, 2011 4:18 PM

Tom,

I'm not sure whether you misunderstand me, or are being tendentious.

Of course I know that we don't get to vote on every policy. But I'm talking about voting for the MEMBERS of the school board, not how those members vote when they get there.

I don't get to vote for the RC bishop, yet my tax money is to go to schools ultimately controlled by him? I call "Unconstitutional!"

Posted by tgflux | April 5, 2011 5:47 PM

And that Obama amicus brief is ridiculous. Bogus logic, right out of the *GOP* "it's my money, I earned it all by myself/government BAD" playbook.

People only prosper in this society, because of the COMMON good, the PUBLIC welfare: dem's wot's paid for by TAXES. The schools, the infrastructure, the ability to not have a food taster to know the food won't kill you (yes, the E coli outbreaks still sometime happen, but consider the alternative)

People are welcome to choose private and/or religious schools but NOT AT THE EXPENSE of taxes for PUBLIC schools...tax money that ONLY properly goes to schools answerable to the public via school board elections.

Posted by tgflux | April 5, 2011 5:56 PM

It is good to see that some of our nation's historic anti-Catholicism (that is the root issue of state constitutional bans on state support of religious schools) is being addressed in a roundabout way. Is anybody else old enough to remember when the King James Bible was read from in public schools? I am 52 and remember that and I know that when my grandmother taught in the 30s through the 50s in Illinois, Mississippi and Kansas there was Protestant Christian prayer in public schools. The reigning ideology in public schools may now be more generally anti-religious than anti-Catholic, but the urge to control how the masses' children are educated remains. Really, what is the issue with giving a subsidy to parents who are saving the public school system 10-15K per child by having them educated elsewhere if not to control the values taught the children?

FWIW, I attended only public schools, my children attend public schools, my wife is principal in a public school and years ago I worked in an Episcopal school that very few folks can afford before I taught in 100% Title 1 public schools. I have no issue with the public elementary school my children attend and next year my kids will be moving to the school that the producer of "Waiting for Superman" lamented as he drove by taking his own kids to private school in Santa Monica. As my children get older, however, I hope they can attend one of the neighborhood Catholic schools that is supported by working class and middle class parents who also pay taxes to support the public schools. I don't want my girls indoctrinated in this society's democratically elected values; I'm a Christian and I want my kids to be counter-cultural. I am pretty sure that I will never be wealthy enough to afford Episcopal schools- with a tax credit maybe.

JC Fisher, I appreciate your opinion and it is certainly the prevailing one in my city and our state of California. I'm pretty sure that you will never be compelled to financially support my kids' religious ed classes, but there is always hope.

Fr. Bill Ledbetter

Posted by LA Episcopal priest | April 5, 2011 6:46 PM

I'm sorry, but I really don't follow the arguments of the folks who disagree with the Supreme Court decision. I am neither a lawyer nor a tax accountant, but here's what it looks like to me. I'd be grateful if someone can explain to me how and why I'm wrong.

(1) Suppose I pay $1000 in tuition for my child at a religious school. I receive a tax credit of $1000. This costs the state $1000 in revenue, so other citizens have to make up for this, whether they approve of my child's religious school or not.

(2) Suppose I donate $1000 to a private educational institution, or to my parish church. My donation is tax-deductible, and therefore my tax liability is reduced by $150, assuming I'm in the 15% bracket. This costs the state $150 in revenue, so other citizens have to make up for this, whether they approve of my choice of educational institution/church or not.

The only difference that I see is not one of principle but of amount. A tax credit is more bucks than a tax deduction. Aside from that, what's the difference?

The administration's amicus brief says, "Rather, the statute merely provides a beneficial tax consequence for private citizens who donate their own funds to STOs of their own choosing." Yeah, so? The Internal Revenue Code provides beneficial tax consequences for private citizens for all sorts of reasons, including religious. Where do we draw the line, and who's going to draw it?

Posted by Bill Moorhead | April 6, 2011 11:15 AM

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