Sunday, June 25, 2006

BRITISH PRIVATE SCHOOLS UNDER ATTACK

The charitable status of private schools and hospitals will be challenged by a powerful campaign led by MPs, charities and lawyers, and backed by the Charity Commission, when the Charities Bill returns to Parliament next week. The Bill replaces the 400-year-old common law definition of charity and removes the presumption of charitable status from independent schools. Instead, it requires all charities that charge high fees to demonstrate that they are of “public benefit” if they are to retain tax breaks worth a total of 88 million pounds a year.

As the Bill does not give any details of what constitutes the “public benefit”, critics believe that it is almost meaningless and want a stricter definition. Without it, the whole Bill could fall, taking with it changes that will modernise the legal framework within which charities operate, they say.

Stuart Etherington, of the National Council for Voluntary Organisations (NCVO), which represents 4,700 charities, said a tighter definition of public benefit was essential. “The Bill must protect and promote the charity ‘brand’ by making it clear that only those organisations that benefit the public can be charities,” he said. He insisted that the NCVO’s stance, which is widely shared by leading charities, was not aimed at excluding particular types of charity. “It’s about ensuring that long-term trust and public confidence in charities is maintained and enhanced.”

The Charity Commission, which will be responsible for ensuring that all registered charities pass the public benefit test, is also calling for a clearer definition of terms. “It would be helpful to see an amendment to the Bill removing some of the uncertainty, particularly as regards fee-charging charities,” a spokeswoman said.

John McDonnell, MP for Hayes and Harlington, is one of perhaps 50 Labour backbenchers who want a more robust definition. He said: “Without it, the Government would have a problem.” Martin Horwood, the Liberal Democrat charities spokesman, favours an amendment modelled on Scottish law, to ensure that charities charging high fees do not place “unduly restrictive” conditions on people wanting to use their services. Scottish law requires the regulator to weigh up the benefit to those that can access a charity’s service against the “disbenefit” to the general public who cannot, particularly where there is a charge involved.

Stephen Lloyd, Head of Charity and Social Enterprise at the law firm Bates, Wells & Braithwaite, said that without such an amendment there would be two types of charity: Scottish and English. “If the English public benefit test is less onerous than the Scottish one, you could see independent schools which might be under threat under the Scottish test setting themselves up as English charities but operating north of the Border,” he said.

A spokesman for the Cabinet Office, the department in charge of the Bill said that the government was happy with the way it was worded. He added: “Of course, it still has to be scrutinised.”

The Independent Schools Council argues that most independent schools that are charities already provide a public benefit, saying that for every 1 pound in tax benefits they get they provide 3 pounds in assistance with fees. The Conservative Party seems implacably opposed to any kind of public benefit test. Andrew Turner, MP for the Isle of Wight, said such a test was unnecessary for schools, religious organisations or charities working for the poor.

Source






Education Savings Accounts: Giving Families Ownership in Education

With college tuitions soaring, parents are beginning to save for their children's education earlier and earlier. A growing number of families are putting their savings in education savings accounts (ESA), which enjoy certain tax advantages. The popularity of these accounts suggests that parents want to control the resources spent on their children's education. Policymakers should consider how these accounts could be used to expand school choice and improve American education. Federal law provides two kinds of educations savings accounts. So-called 529 plans allow for tax-protected savings for higher education through state-managed plans. Coverdell ESAs allow for tax-free savings in privately-managed accounts for K-12 and higher education expenses.

529 accounts-named after a section in the IRS code-offer families two ways to save for college expenses. This first option is to lock in today's tuition rates and prepay tuition at a participating higher education institution. The second is to invest in a state-managed investment account where earnings grow tax-free and can be used for tuition when a child enrolls. Under 529 plans, annual contributions can range from $10,000 up to $300,000 in some states. States contract with financial institutions to manage the 529 accounts, and each state offers families different investment options. Most states don't require residency to invest in a 529 plan, and so families are free to shop the state plans to find the best investment. This is important, because some states offer different fees and rates of returns, and competition ensures that families can get the best deal.

The Financial Research Corporation reports that total assets in 529 college savings plans totaled $68 billion at the end of 2005-30 percent over 2004 levels. One reason for the growing use of 529 plans is that 25 states provide various tax incentives-credits or deductions-for investment contributions. (Learn more about 529 accounts here [http://www.savingforcollege.com/college_savings_201/] and whether your state offers tax incentives incentive here [http://www.findaid.org/savings/state529deductions.phtml].)

Until now, states have limited tax incentives for contributions to the state's own plan. But this year, the Maine state legislature enacted a per-beneficiary deduction worth $250 per year for a contribution to any state's 529 plan. This could pave the way for more states to provide tax breaks for out-of-state plans. If so, families can look forward to greater competition among providers and better investment options and returns. Unlike 529 plans, Coverdell Education Savings Accounts (ESAs)-named after the late Georgia Senator-let families contribute up to $2,000 per child annually in a tax-free savings account that can be used for K-12 or higher education expenses. Eligible expenses include K-12 private school tuition, books, school supplies, tutoring, and after-school programs. Unlike 529 college savings plans, Coverdell ESAs can be opened and managed by banks and brokerage firms, similar to 401(k) accounts.

No state currently offers tax incentives for Coverdell ESAs. And since the tax benefits of Coverdell ESAs are deferred, few families are using them. But many American families could make good use of this opportunity to save for their children's education.

As familiarity with education savings accounts grows, supporters of parental choice in education should consider reforms that give families control of education resources. One option would be for states to level the playing field between 529 accounts and Coverdell ESAs by evening out the tax breaks for contributions to either savings vehicle. Another option would be for Congress to reform 529 accounts to include K-12 education expenses, like Coverdell ESAs do today. At a minimum, federal lawmakers could increase contribution limits for Coverdell ESAs to give families greater ability to save.

The promise of a system of widespread ESAs is great. Parents, grandparents, and other relatives would have greater opportunities to save for a child's education. Charities, corporations, and individuals could be given incentives to make contributions to low-income children's accounts, which could be used to pay school or college tuition or any other legitimate educational expense. State governments could create matching-funds plans to help needy children-seven states are already doing this with their 529 plans.

Widespread use of education savings accounts would improve the efficiency of education spending. According to the Department of Education, U.S. taxpayers spend approximately $500 billion annually on K-12 education. Government officials and bureaucrat largely dictate how it's spent. Expanding access to education savings accounts would begin to return control of education decisions to parents. With parents in charge, educators would compete for students and tailor their products and services to individual children's needs.

Choice and competition are keys to improving American education. By giving parents greater power to direct their children's education, education savings accounts could make widespread choice and competition a reality.

Source

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For greatest efficiency, lowest cost and maximum choice, ALL schools should be privately owned and run -- with government-paid vouchers for the poor and minimal regulation.

The NEA and similar unions worldwide believe that children should be thoroughly indoctrinated with Green/Left, feminist/homosexual ideology but the "3 R's" are something that kids should just be allowed to "discover"


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