Democrats’ College Disaster Plan

The plan to push a college-tuition tax-deduction plan must be opposed.

Don’t get me wrong: if I had kids going into college, I’d love this.  It’d mean I could afford to pay more… etcetera etcetera.

So, come on,  BA, what’s so wrong with this?

Well, let’s go Socratic for a minute.  What happens when lots of money chases a relatively stable product?

That’s right:  there’s less pressure to keep prices down.  And that means that if this goes through, you’re going to see costs per credit hour JUMP.  Which will be fine for those folks who are helping their kids, as the relative increase will probably not keep up with the economic benefits.

But what happens if you’re putting yourself through school?  What happens if you’re poor and trying to scramble your way up out of the working class?

You’re screwed, that’s what.  And while, libertarian that I am, I’m all about the tax cuts, a specific, targeted deduction policy that will inherently support class divisions within society is not a quality policy.

I have a better idea.  Let’s stop taxing income tax altogether in favor of a consumption tax, and establish tuition fees as non-taxable items just like food.

But if we did that, Republicans and Democrats playing Icarus would have no way to try to engineer society from their arrogant, enlightened perches.

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3 Comments

  1. Zathras

     /  December 4, 2006

    Regarding a lack of pressure to keep costs down, that ship has sailed. Student loan programs have relegated so much of the costs to the distant future that there already is little incentive to keep the costs down. This program in reality creates tax treatment balance between up-front payments, which are not deductible, and student loan payments, which have deductions for interest.

    Regarding the switch to a consumption tax, a fascinating survey came out recently. It was a general survey on the opinions of economists, and it was to determine what the prevailing opinion was. On the question of going to a consumption tax, they were pretty much evenly divided. They were however, strongly against removing the estate tax. Here is the article:

    http://www.bepress.com/cgi/viewcontent.cgi?context=ev&article=1156&date=&mt=MTE2NTI2NzY4OA%3D%3D&access_ok_form=Processing

    Some of the opinions were pretty guessable–they were strongly against farm subsidies and protectionism. Some however were not. A majority were in favor of the minimum wage, and more economists supported universal health insurance than opposed it. The article is an fascinating read.

    Reply
  2. Good point: but still, this will only INCREASE said lack of controls…

    I’ll see if I can print it and look it over. Leaning towards Chicago economics (obviously), I’m probably going to hiss and spit a little, but…

    Reply
  3. happycrow

     /  December 5, 2006

    Not a bad little blurb!

    Reply

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