Hillary Clinton is pandering to the youth vote by holding out loan-free public college tuition and continuing President Obama’s free two-year community college plan. What Clinton and Obama don’t want to admit and hope young people are too stupid to understand is that “free” college (or free anything) is never free; someone is paying the price and indeed it is all of us who will pay the price.
Clinton’s $350 billion plan reported yesterday by my colleague Charlotte, is supposed to make college education more affordable for future students and families. Her plan relies on states bidding for federal dollars by providing more aid to students as grants rather than loans to be repaid. Where do those federal dollars come from? Not from some endless black hole of resources that is our federal budget. It’s from our own pockets.
The “our” in this case are the wealthy or high-income earners. Clinton wants to close the “tax loopholes and expenditures of the most fortunate,” according to her campaign. However, there are no details on just which blessed Americans have the misfortune of shouldering these new obligations simply because they earn more than others. There are also no details on which tax loopholes and expenditures will be on the chopping block. To come up with $350 billion, you need to eliminate a good number of these.
Democrats are quick to turn on the wealthy as the source of revenue for every new big spending spree. They think as though the resources of the wealthy – who tend to be defined as those making about $200,000 or more – are endlessly self-renewing and should be redistributed to everyone equally. There simply aren’t enough rich people to fund every plan from the Left (and the Right),however.
CNNMoney reports:
But a campaign aide told CNNMoney that the plan to "limit certain high-income tax expenditures … is a version of a similar plan that President Obama has included in several of his recent budgets."
What Obama has proposed repeatedly is to limit the benefit that high-income households get from itemized deductions and certain exclusions (e.g., money that's normally treated as tax free, such as employer contributions to one's health insurance).
…
The Treasury estimated that the president's proposal could bring in more than $600 billion over 10 years. But if certain deductions or exclusions — such as those for charitable contributions — are exempted, that would lower the revenue raised.
There are other ways to curb tax breaks on the rich, of course. One that Clinton has said she favors is to tax so-called carried interest as ordinary income. Carried interest is a type of compensation paid to investment fund managers that currently is taxed at the lower capital gains rate of 20%.
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Another problem is that taxing the rich is the default go-to solution for many expensive proposals from those on the left and the right: deficit reduction, tax reform and expanding middle class tax breaks, to name just a few.
And there still aren't enough rich people around to pay for all of those worthwhile ventures by themselves.
Even if we drained every wealthy person of their resources in the end everyone will be equally miserable, not equally better.
Apart from money, here are a few more thoughts on why Clinton’s plan for young Americans does us no favor.
First, it removes the element of personal responsibility. Human behavior dictates that the more of a good we can consume at no cost is the more we will consume it – and waste it. By not paying a dime into our higher education, students lose the motivation to be as invested in their education as if they had paid for it (even partially) by funding it themselves. Compare the students who work their way through college versus those who have it paid for by someone else. Which are the most motivated?
Second, it adds two to four more years of big government indoctrination. Instead of K-12 public education, progressives are pushing for K-14 or K-16 public schooling. The government has done such a great job at providing free schooling that prepares our nation’s kids. Imagine what a few more years of free schooling will do.
Third, by choosing public education to benefit from this plan (like community colleges under President Obama’s “free” college tuition plan), the government would in effect be choosing which institutions are winners and treating them better than private institutions such as nonprofit colleges and for-profit colleges. It’s not the role of government to take sides such as to lift up Samsung over Apple or Yahoo search over Google. That’s called cronyism but as awe know in too many states and cities the government is choosing taxicab industry over Uber.
Finally, making public colleges and institutions more attractive increases demand, but if they can’t make room to accept the flood of applicants, what good will that do? Costs rise when a good becomes more scarce and by making it “free,” it will get scarce very quickly.
Clinton and her predecessor can keep their tired free money plans to themselves. They’ll do little good for this generation and we know it.