This study analyzes interstate redistribution of Federal tax money under Title One of the Elementary and Secondary Education Act of 1965. First, the consistency of the criteria used to distribute funds is studied to see if people of similar financial positions are treated "qually. Results show that when compared with an alternative--the Orshansky index--the present official need index provides a satisfactory measure of the disadvantaged school population. The second part of the analysis looks at how people in different financial positions are treated. Consideration of both net transfers and gross aid leads to the conclusion that the degree of redistribution under the present program is very small. This suggests that the first major act of Federal aid to education is conservative when judged by distributional standards. If future Federal aid legislation is to make a marked contribution to the equalization of States' ability to provide education, fiscal capacity must be introduced as a criterion for distributing Federal funds. (TT)