This is the Cato Daily Podcast for Monday, March 18th, 2013.

I'm Caleb Brown.

Our scholarship tax credit programs, Welfare for the Wealthy.

Jason Bedrick is a visiting policy analyst at the Cato

Institute, he argues that scholarship tax credits overwhelmingly help children

from low-income families. As for scholarship donors, he says at best they break even.

There are 14 scholarship tax credit programs around the country

which grant tax credits to either corporations or individuals or both for donations to

non-profit scholarship organizations.

And these scholarship organizations fund generally low-income students and some middle-income students to attend

non-public schools. A couple weeks ago Valerie Strauss at the Washington Post

argued that these programs constituted welfare for the wealthy because two reasons.

One that the donors are somehow benefiting by receiving a tax credit and secondly that the students

themselves are wealthy because she argued that the scholarships don't cover the full cost of tuition.

She said poor families can't make up the difference only wealthy families can. But in fact the reality is exactly the opposite on both

those points. There are only three states where the tax credits are 100% and in

that case the donor is no better or no worse off than they

would have been had they simply paid their taxes. They merely break even.

In a follow-up post Professor Kevin Wellner from the University of Colorado argued that they do profit because they can deduct it from their taxes.

But they could also deduct their state taxes.

So really, in those three states at most the donors break even.

But in the other 11 programs around the country where the tax credits vary from 50% to 90%. The donor would be financially better off if they had

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