Sunday, January 11, 2009

A Very Bad Good Idea

In the course of composing what sounds like the winning entry in a Thomas Friedman column parody contest, Thomas Friedman wrote the following in his new column:

"One of the smartest stimulus moves we could make would be to eliminate federal income taxes on all public schoolteachers so more talented people would choose these careers."

Look, being a columnist for the New York Times is a pretty good gig and one of the minimum requirements ought to be spending the 30 seconds it takes to figure out that this is, in fact, a terrible idea. 

Federal income taxes are progressive. The average starting salary for teachers is just over $35,000 per year. A new teacher at that salary without dependents who doesn't itemize and files the 1040EZ would pay just over $3,500 in federal income taxes. A veteran teachers making $65,000 per year is going to pay, depending on the assumptions you make about marriage, dependents, deductions, etc., closer to $10,000 per year. Salary schedules and pension benefits in the teaching profession are such that compensation is already skewed toward veteran teachers. This would make that worse. It would also be really expensive: 3.2 million public school teachers at an average salary of $50,000 and federal tax liability of $6,500 = $20 billion per year, more than Title I and Title II of NCLB combined. If we're going to spend that kind of money on enhancing teacher quality--and in the abstract, that's a good idea--how about spending it in a way that's actually focused on attracting new teachers to the profession, or rewarding high-performing teachers, or teachers in shortage areas, or teachers who teach in high-needs schools, or some other set of policies where resources are matched with goals in a minimally thoughtful way? Never mind the problems of picking one worthy profession among many for special treatment in the tax code and all that entails. 
 

3 comments:

Stephen Downes said...

The plan is probably a bad idea, but not for the reasons you outline here.

Your criticism represents the program as though the only impact would be on existing teachers, and of course, veteran teachers would be favoured under the system.

But the purpose of the plan would be to encourage new teachers to apply. It would probably be success at this, because it promises a greater high end salary in the long run.

This probably generalizes. In any system designed to improve the quality of applicants by increasing compensation, you have to reward *current* as well as future teachers, and such rewards will almost certainly be progressive.

Why? Because any other system smacks of unfairness, and demonstrating that you manage a system in an unfair manner is a significant *disincentive* to new applicants.

Indeed, I would suggest that one of the major deterrents to high quality people considering a teaching career is the barrage of postings, just like this one, that attack existing teachers, teacher unions, existing contracts, and the rest. Nobody wants to work under such conditions.

Anonymous said...

What's going on here? You've made four posts in a row where we are in substantial agreement. I still don't know what you're talking about in that post on Wall E and Frank Miller. As long as they don't work for Michelle Rhee or for a hedge fund, I'll keep an open mind on them.

Anonymous said...

It's not even remotely a bad idea. Tax incentives have always been used to stimulate growth of business. By eliminating Federal taxes on teachers we encourage more people to enter the profession, and almost certainly increase retention. BTW in which other profession is it considered unfair to pay more to someone with more experience? In nyc our salary scale takes a pretty good jump after 6 years, and that's about how long it takes to become a good teacher. If you read the article again, notice that Friedman wants to double the salary of teachers in shortage areas like science and math, one of your suggestions.

You can't reward high-performing teachers because there is no way to fairly measure performance. That idea is a nonstarter.