1/6th of Education Tax Credits are Fraudulent, Yet Another Reason to End Them
This Treasury Inspector General report gives us yet another reason to end the education tax credits:
17.5% of all the money “paid” is fraudulent. Figure 2 tells us that there were $18.3B in education tax credits, and figure 3, shown below tells us that $3.2B of it was fraudulent.
Super-committee, take note, killing the tax credits would yield significant savings (probably around $20B a year, though how this is scored by the CBO depends on the currently legislated future of the programs). Moreover, this will have virtually no effect on college affordability (tax credits and state appropriations are the types of aid that are most likely to be swallowed whole by colleges without helping to offset tuition).
For the more liberally minded, the tax credits are regressive, with the rich getting more than the poor. For the conservatively minded, this is a $20B a year or so subsidy to those bastions of liberalism that could be used to forestall impending tax increases instead.
To sum up, end the education tax credits. End them now.