Egalitarianism Looks Good in the Showroom

One of the rewards from working hard and making a commitment to your family is that you can provide your children with a wide range of opportunities. Everyone benefits from this: your children, obviouisly, but also your neighbors who do not have to pay higher taxes to take care of your kids. You also set a good example for others who see that hard work and personal responsibility pay off.

Not everyone likes this direct relationship between individual choice and decisions on the one hand, and outcomes on the other. Take this group of Republicans in the South Carolina legislature, e.g., who according to an article in The State in Columbia, SC want to remove one of the strongest incentives a family bread winner has for climbing the income ladder:

A group of lawmakers say they’re working to level the playing field for the state’s school children in a new bill that would create a uniform tax rate at both the local and state level. Under the bill, a uniform tax rate at both the state level and local level would be created to ensure funding parity among the state’s public school students enrolled in its 85 school districts. Currently, local funding varies, depending on where a student lives. Under the bill, certain groups of students, including those who live in poverty, those who are gifted and those who are disabled, would receive a set amount of additional money toward their education. Research shows these students cost more to educate. “It’s about having a student in Marlboro County have the same educational opportunities as students in Richland County,” said Rep. Mia Butler Garrick, D-Richland.

How are these egalitarians going to guarantee that the educational standard will be set by wealthy counties like Richland and not by poor counties like Marlboro? Just because you introduce a uniform funding code for every school in the state, does not mean that the funding level will remain, or even begin, at the top. There is a reason why poor counties have poor school funding: they cannot afford to spend more on schools. Therefore, in order to implement egalitarianism in funding the state is going to have to couple this uniform tax rate law with an elaborate redistribution scheme where high-income counties feed low-income counties.

Because poorer counties are supposed to be elevated in terms of funding, this will by necessity mean that the higher-income counties must pay higher taxes. They will now not only have to fund themselves at their current high level, but also provide enough funding to elevate everyone else to their level.

These higher taxes on the highest earners in South Carolina will inevitably have a negative effect on the state economy. On the margin, there will be job losses and a marginal erosion of the tax base off which goverment pays for its egalitarian school funding scheme. Add to this a future recession, and the recipe is written for downward adjustments of the uniform funding standard.

In plain English: as this egalitarian funding project goes into effect, the state is slowly but steadily putting the rich counties, with the best schools, on a track toward mediocrity – without guaranteeing in any way, shape or form that there will be an elevation of funding, let alone education standards, in lower-funded, lower-performing schools.

None of these arguments seem to have made their way into the public arena in South Carolina. The aforementioned news article in The State makes a very brief mention of any sort of criticism of the egalitarian funding idea:

But critics say it’s unfair use local dollars from local taxpayers in one part of the state to pay for the education of students in another part of the state.

The fairness argument is of course a valid one. As the state dictates school funding, it deprives people of one of their incentives to work their way up and make more money. Over time, the cumulative effect of such incentives deprivation is fewer people aspiring for higher incomes, lower earnings on average  – and a weakened tax base. Interestingly, this will also mean that fewer counties will stay above the “redistribution rim”: there will be fewer counties that feed the redistribution scheme and more counties that become takers from the system. This increases the cost of redistribution. If the state wishes to maintain the high standard it has promised everyone, it will have to start raising taxes just to keep school funding afloat. This in turn leads to further depression of the state’s economy without yielding any new, positive results. Taxes will go up just to maintain status quo in the schools.

Egalitarianism looks good in the showroom. If you are not willing to do the research, you won’t realize its maintenance costs until you are out on the road and stuck with it.