It was a Republican administration which 12 years ago instituted a policy of denying tax-exemptions to private schools and colleges practicing racial discrimination. Now, ironically, another Republican administration has reversed that decision and the IRS will no longer use racial segregation as a basis for denying exemption from federal taxes.
The decision is an unfortunate one. It would seem to be one more step in diluting the government's influence on the side of fostering a just and compassionate society. Though the Reagan administration may not intend the decision as such, it will be perceived as encouraging the formation and expansion of segregated private schools. The net result is another blow to the public schools, especially in urban areas where whites have fled and enrollments already are almost all black.
In fairness, the issue of where one draws the line of government power is not clear-cut. In the case of church-related schools, constitutional scholars see potential problems when the IRS is given too much authority. If the IRS can withdraw tax-exempt status in the case of race questions, for example, it might also decide to withdraw it for other ''religious'' practices not thought to be in the public interest. In the given situation, it should be noted, the two cases which brought the issue to the fore involved religious institutions.
Even church-related schools have a moral obligation to respond to general law. But, such schools aside, there would seem to be no justification whatever to permit tax exemptions for segregated non-church-related private schools when in fact the schools came into being to circumvent desegregation laws. In such case government policy is clearly pushing education in one direction and cannot claim that it is being neutral. If its action encourages the establishment of segregated private schools, the governmnent is implicated.
The Treasury Department justifies its decision on grounds that the IRS has too much authority without sufficient guidance from Congress. It may have a point. But, if the administration wishes to combat the racial discrimination it says it deplores, it can ask Congress to order the IRS to reinstitute the withholding of tax exemptions. Certainly it is reasonable that the IRS be mandated to use its power in line with general public policy, i.e. antidiscrimination policy.
Some argue that the IRS should not be employed as an instrument of social change. The argument is disingenuous. It has been decades since the IRS has been used just to raise revenue for the federal government. Today it is clearly a means of furthering economic and social change, not to mention catching criminals. The Reagan administration, no less than previous administrations, is using tax policy to move the country in certain directions.
It is to be hoped Congress will lay down more precise guidelines for the IRS. Also, that civil rights lawyers will find a way of prompting a judicial review of the new Reagan policy. If there are legitimate ambiguities, these ought to be resolved. Until then, the public cannot but be dismayed at this sudden financial boon for private schools which practice racial bias and flout the spirit of the law. Surely this is not the American way.