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Based on the view that tuition tax credits will benefit all taxpayers, this report examines the history and economics of educational financing to furnish a background for an explanation of current proposals to provide tuition tax credits. The author begins with five theoretical economic models of school finance designed to explain the logic of tuition tax credits. The report then looks at several historical models of school finance including the New York public school system and the economic bases for free and for compulsory schooling. The rationales for current proposals to establish tax credits are then examined and some criticisms of tuition tax credits are refuted. The report then makes a case for a potential gain for taxpayers from education tax credits based on the contention that they will generate competition throughout the school system and bring down the cost of education. Early origins and recent federal proposals for tax credits are then examined, including Tom Paine's education tax credit system, U.S. federal tax credit and tax deduction schemes until 1977, the Packwood-Moynihan Proposal, and the 1979 tuition tax credit bill. The report concludes with descriptions of education tax credit proposals in California and Washington, D.C., and a comparison of tax credits and vouchers. (Author/JM)

This document comprises two papers. The first, by Professor Martin Carnoy of Stanford University, provides a dialectical view of the socialization functions of schooling. In the first part of his paper, Carnoy relates how the dialectical model best explains the historical mechanisms by which the socialization functions of schooling developed, and the particular role of schooling in serving the capitalist social order. The dialectical model is based on three variables: the basis of organization of the economy, the structure of labor markets resulting from that organization, and the correspondence between institutions of socialization and the economic and social needs of society. The bulk of Carnoy's long paper explores the objectives of capitalist production and their relationship to social class differences and conflicts. The second paper is by Professor E. G. West of Carleton University in Ottawa, Canada. He briefly questions the statistical proofs and reasoning processes by which Neo-Marxists conclude that the capitalist class dominates society and manipulates the public schools. (Author/AV)