Question

What is the tax price of a school equalization scheme? How might increasing the tax price affect overall per-pupil spending in a state? Explain why.

Answer 1

School equalization scheme can be seen as a law which makes it compulsory to redistribute the funds across the different communities in a state to make sure that equal financing of school is facilitated. This scheme differs in different states. The different structure will result in variation in tax prices.

Tax Price:- for school equalization scheme, the total amount of revenue a local district is required to raise in order to have the $1 of more spending.

From the past experiences and evidence, it is observed that extreme school equalization scheme with a very high range of tax-price may result in the overall reduction in per –pupil spending.