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Taxing For Success

Robert B. Reich

March 04, 2005

It's pretty obvious why Wellesley, Mass. has better public schools than Washington, D.C.: a higher property tax base. Our system for funding public schools skews things in favor of kids lucky enough to live in affluent districts with high property taxes. And unless the playing field is leveled, all the achievement testing in the world isn't going to help kids in poor districts succeed. Here, Robert Reich lays out his simple tax plan for change.

Robert B. Reich is the Maurice B. Hexter Professor of Social and Economic Policy at Brandeis University, and was the secretary of labor under former President Bill Clinton.

Every few years, the nation's governors come together to proclaim that America’s high schools are failing. The group solemnly resolves to make high schools better. They did it again just last weekend. Bill Gates even made a speech about how bad our schools are. The conference and the speech got lots of press, which, I suppose, is what everyone wanted.
 
But after these sorts of meetings, governors typically go home and do what they were doing before—which is to administer more tests. We’re training a whole generation of kids to take tests, but they won’t be able to get a good job because they haven’t been trained to think.
 
Here’s the good news. Not all of America’s high schools are failing to teach kids to think. Go into a high school in an upscale suburb like Wellesley, Mass., or Evanston, Ill., or Scarsdale, N.Y., and you’ll find young people who are learning to identify and solve new problems, recognize patterns, think critically. What’s the secret? These classrooms rarely have more than 20 students, and the teachers know their material and they know how to teach it.
 
There’s a simple reason why upscale suburban schools tend to have small classes and good teachers, when so many of the rest of the nation’s kids are in classes of 30 to 40 with teachers who are inadequately trained. It’s because the upscale suburban schools can afford small classes and can pay high enough salaries to attract skilled teachers. You want more teachers, you have to pay for them. You want more talented teachers, you have to pay them. The law of supply and demand is not repealed at the schoolhouse door.
 
Many of our nation’s school districts can’t afford small classes and skilled teachers. That’s because, increasingly, Americans have been segregating by income into different communities. Roughly half of school revenues come from local property taxes. So it shouldn’t be surprising that rich communities with high tax bases can afford good schools while poor communities with low tax bases cannot—and middle-class communities whose budgets are coming under increasing strain are finding they can’t, either.
 
What’s the answer? Not more conferences where governors solemnly talk about how bad high schools are and then administer more tests to prove it. At the very least, we need a way to finance public education that’s saner and fairer than relying on local property taxes.
 
Here’s my proposal: Get rid of the property tax altogether—at least the largest portion of it, now used to finance local schools. Property taxes are wealth taxes that end up discriminating against poor and middle-class communities. Let’s move instead to a national wealth tax—say, one-tenth of one percent of everyone’s total assets each year, to be distributed to school districts around the country on the basis of the number of kids they have to educate.
 
It’s simple and fair, and gives every school a fighting chance. But rationalizing school finances like this would be politically impossible to pull off—unless, of course, the nation’s governors want it done.
 
This commentary originally appeared on Marketplace, public radio's only daily business news program, and is reprinted via a special arrangement between TomPaine.com and Robert Reich. Marketplace is produced by Minnesota Public Radio and is heard on 322 public radio stations nationwide. More online at www.marketplace.org.



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