In their view the tax credit is, for Flast purposes, best understood as a governmental expenditure. That is incorrect. It is easy to see that tax credits and governmental expenditures can have similar economic consequences, at least for beneficiaries whose tax liability is sufficiently large to take full advantage of the credit. Yet tax credits and governmental expenditures do not both implicate individual taxpayers in sectarian activities. A dissenter whose tax dollars are “extracted and spent” knows that he has in some small measure been made to contribute to an establishment in violation of conscience.... In that instance the taxpayer’s direct and particular connection with the establishment does not depend on economic speculation or political conjecture. The connection would exist even if the conscientious dissenter’s tax liability were unaffected or reduced...... When the government declines to impose a tax, by contrast, there is no such connection between dissenting taxpayer and alleged establishment. Any financial injury remains speculative.... And awarding some citizens a tax credit allows other citizens to retain control over their own funds in accordance with their own consciences.Justice Scalia also wrote a concurrence, joined by Justice Thomas, urging that Flast be overruled.
Justice Kagan wrote a dissent, joined by Justices Ginsburg, Breyer and Sotomayor, arguing that the majority's "arbitrary distinction" between expenditures and tax credits:
threatens to eliminate all occasions for a taxpayer to contest the government’s monetary support of religion. Precisely becauseappropriations and tax breaks can achieve identical objec-tives, the government can easily substitute one for the other. Today’s opinion thus enables the government toend-run Flast’s guarantee of access to the Judiciary.
