Senator Bernie Sanders wants Wall Street to help fund higher education, and he will be introducing a bill to make that happen. While the bill most certainly won’t get very far in Congress, it’s an idea that the United States should seriously consider implementing if we could get around to electing enough lawmakers who would have the guts to pass it.
Republicans are naturally throwing a fit over the plan (which would be funded by a transaction fee on Wall Street transactions), and they’re claiming that paying down the national debt will help college students – which makes very little sense. Bernie Sanders has explained how the fund would work, and it makes sense considering the fact that the American taxpayers have bailed out Wall Street in the past.
“The program that we’re offering will be a grant program by which the federal government puts in $2 and the states put in $1,” Sanders said. “Now, $70 billion is a lot of money, but in a nation in which we lose $100 billion every year because corporations stash their money in tax havens around the world, that’s one way you can approach it.
“What we are going to be dealing with tomorrow is a transaction fee on large stock transfers,” Sanders continued. “So we’re going to ask Wall Street, whose greed and recklessness drove us into the recession that we’re climbing out of right now, to start helping us fund college education.” (Source)
This idea could work, but not so long as Wall Street-backed politicians control the House and Senate. College students are graduating with tens of thousands of dollars worth of loan debt, and while $70 billion may seem like quite a bit of money, it’s a small fraction of what we could spend when compared with other items in the federal budget.
Republicans have also dismissed the proposal for free higher education and say that there are other ways to make college more affordable, but they’ve proposed very little in the way of options that would work. However, when you consider the fact that Ted Cruz’s wife’s employer Goldman Sachs makes billions in profits annually and we bailed out the financial sector for $230 billion to avoid a complete economic collapse, it’s not unreasonable for them to invest in the future of America’s higher education.
Another way to fund higher education would be to increase taxes on the richest Americans, something Republicans have repeatedly claimed would harm the economy, despite historical data which refutes their argument. Bill Gates recently brought up the point that the American economy actually thrived during periods of higher taxes on the top earners, a statement Politifact rated as “Mostly True.”
“The highest economic growth decade was the 1960s. Income tax rates were 90 percent,” he said on CNN’s Fareed Zakaria GPS May 17, 2015. “I mean, the idea that there’s some direct connection that all these innovators are on strike because tax rates are at 35 percent on corporations, that’s just such nonsense.”
Gates was making the point that low tax rates do not necessarily lead to economic prosperity. To do so, he mentioned a time when high growth and high marginal tax rates co-existed. Marginal tax rates are tax rates applied to each bracket of income. The more money people make, the higher their marginal tax rates, and the people with the highest income pay the top rate. (Source)
We don’t have to necessarily raise taxes on the wealthiest Americans to fund higher learning, but it isn’t unreasonable to ask Wall Street to invest more in the education system they count on to produce future employees. America is rapidly falling behind the rest of the developed world in academic achievement, and while funding isn’t the only factor, it is an important one.
Whether Bernie Sanders, Hillary Clinton or someone else is the Democratic nominee in 2016, increasing funding for education overall must be a part of their platform. If America wants to remain a world leader, it’s imperative that we do.
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