Tax polluters, not students.
Republicans are willing to impose taxes on college students while shying away from taxing polluters; the GOP has it backwards, Reich says.
Indiana University senior Randall Burns holds a sign he said represents the average debt a college student has after graduating during a protest on IU's campus earlier this year. The GOP should put aside economic incentives and tax polluters, not students, Reich says.
Jeremy Hogan/Bloomington Herald-Times/AP/File
A basic economic principle is government ought to tax what we want to discourage, and not tax what we want to encourage.
For example, if we want less carbon dioxide in the atmosphere, we should tax carbon polluters. On the other hand, if we want more students from lower-income families to be able to afford college, we shouldn鈥檛 put a tax on student loans.
Sounds pretty simple, doesn鈥檛 it? Unfortunately, congressional Republicans are intent on doing exactly the opposite.
Earlier this year the Republican-led House passed a bill pegging student-loan interest rates to the yield on the 10-year Treasury note, plus 2.5 percentage points. 鈥淚 have very little tolerance for people who tell me that they graduate with $200,000 of debt or even $80,000 of debt because there鈥檚 no reason for that,鈥� Rep. Virginia Foxx (R-NC), the co-sponsor of the GOP bill, .
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听Republicans estimate this will bring in around of extra revenue, which will help pay down the federal debt.听
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听In other words, it鈥檚 a tax 鈥� and one that hits lower-income students and their families. Which is why several leading Democrats, including Senate Majority Whip Dick Durbin, oppose it. 鈥淟et鈥檚 make sure we don鈥檛 charge so much in interest that the students are actually paying a tax to reduce the deficit,鈥� he .
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听(Republicans claim the President鈥檚 plan is almost the same as their own. Not true. Obama鈥檚 plan would lead to lower rates, limit repayments to 10 percent of a borrower鈥檚 discretionary income, and fix the rate for the life of the loan.)
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听Meanwhile, a growing number of Republicans have signed a pledge 鈥� sponsored by the multi-billionaire Koch brothers 鈥� to oppose any climate-change legislation that might raise government revenues by taxing polluters.
Officially known as the 鈥�,鈥� its signers promise to 鈥渙ppose any legislation relating to climate change that includes a net increase in government revenue.鈥�
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听By now 411 current office holders nationwide have signed on, including the entire GOP House leadership, a third of the members of the House as a whole, and a quarter of U.S. senators.
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听The New Yorker鈥檚 Jane Mayer that听two successive efforts to control greenhouse-gas emissions by implementing cap-and-trade energy bills have died in the Senate, the latter specifically targeted by A.F.P.鈥檚 pledge
Why are Republicans willing to impose a tax on students and not on polluters? Don鈥檛 look for high principle.
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听Big private banks stand to make a bundle on student loans if rates on government loans are raised. They have thrown their money at both parties but been particularly generous to the GOP. A 2012 report by the nonpartisan Public Campaign shows that since 2000, the student loan industry has spent more than on lobbying.
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听Meanwhile, the Koch brothers 鈥� whose companies are among 鈥揾ave long been intent on blocking a carbon tax or a cap-and-trade system. And they, too, have been donating generously to Republicans to do their bidding.听
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听We should be taxing polluters and not taxing students. The GOP has it backwards because its patrons want it that way.