Taxation is an ancient and ubiquitous concept that forms one of the central pillars around which civilisation has been built. Taxation plays a critical role in society and has the capacity to affect the lives of everyone within it. History vividly highlights that, while taxation has brought great prosperity to nations, it has also fuelled bitter conflicts. Taxation can invoke passionate emotions in people about their rights and obligations and is a topic on which rational people often have diametrically opposed views. Ultimately, taxation is a powerful instrument that governments use to fund their activities and shape their economies. Without it, they would not be able to survive. While the features of taxation have evolved considerably over the years, taxation remains a fundamental characteristic of the modern nation state and an integral part of the overarching architecture that lies behind the economic systems of every developed country in the world. Its inescapable and pervasive nature was recognised long ago by Benjamin Franklin, who famously wrote: ‘In this world nothing can be said to be certain but death and taxes’.

From the 1960s on there had been a bifurcation in the welfare states’ approaches to social protection. Many (continental) European countries had chosen high taxes, high public spending, and universal programs. The United States and some others, especially, Anglo-Saxon countries, had used tax burdens reduced, by “tax expenditures,” for some groups. These groups benefited from the reduction in their tax burdens in the same way as the citizens in continental European countries were helped by higher public spending. The tax expenditure tended to be more beneficial to richer individuals while the focused spending programs became progressively less focused, because of political pressures and corrupt practices to expand accessibility to the programs. Tax expenditures also reduced the tax burden on corporations, creating corporate welfare programs. There was a tendency to see social spending as welfare but not tax expenditures.

The sluggish growth of vouchers into the first decade of the twenty-first century prompted voucher supporters to reevaluate their strategy. Ballot initiatives proved fruitless, so supporters switched to state legislatures and sought to distance the state from private schools by funding vouchers through tax credits rather than direct appropriation. The full fruits of attenuated governance matured with Republican victories during Barack Obama’s presidency. This chapter shows that the doubly distanced tax credit form enabled individualist and accommodationist forces to divert public funds to private religious institutions without appearing to do so. Due to the lingering importance of communitarian public schooling and secularist approaches to church–state relations among the nation’s many judges, doubly distanced policies were safest. Statistical analysis demonstrates that they were, and are, least likely to be challenged in court or struck down as unconstitutional. Attenuation is a powerful strategy for rival forces in America’s foundational struggles because it enables policymakers to achieve their goals obliquely. The link between state and legally controversial policy outputs is plausibly deniable in crucial venues of policy contestation, provided that elites follow the attenuation strategy consistently.