Philip Hackney

Document Type



Should nonprofit charter schools be considered “charitable” under § 501(c)(3) of the Internal Revenue Code and be entitled to the benefits that go with that designation (income tax exemption, charitable contribution deduction, etc.)? Current tax law treats them as such; the question is whether there is a good rationale for this treatment. In addition to efficiency and equity, I consider political justice as a value in evaluating tax policy. By political justice, I mean a democratic system that prioritizes the opportunity for more people to have a voice in collective decisions (political voice equality or PVE). Thus, a tax policy that decreases PVE violates the value of political justice. Efficiency theory and equity provide modest help in evaluating the charter question, but the tool of political justice provides important value. When viewed in its entirety, granting tax exemption to charter organizations violates the norm of political justice. The charter movement takes decision-making regarding community education away from a community and gives it to private parties. Instead of the community controlling major educational decisions, charter management organizations control those decisions. Still, valid democratic authorities across the country have chosen to provide some education through charter vehicles. Given the strong interest in keeping tax policy in harmony with democratically chosen policies, the most ideal solution to this conflict would be to maintain tax exemption. However, to be charitable, a charter school and its management organization ought to be democratically operated in some broad sense. The Article thus suggests some ways to increase the democratic accountability of charters.

Included in

Law Commons