10 Reasons the Rich Should Be Taxed to Pay for Free College Education
The college education system in the United States is in complete disrepair in the opinion of many. Students who want to better themselves are forced to pay extortionate fees that increase every year. The loans available to students have far less favorable terms than the loan on a mortgage, despite the similarities in size.
The truth is that a college education is no longer worth its dollar value. This makes it impossible for students who are not born to wealthy parents to pay for college without entering financial ruin. However, they are forced to continue to go to earn these credentials because the wealthy elite also do so, and they control the jobs.
Whether they admit it or not, the America’s wealthiest families are in control of the education system. They set the bar high so that only those who they deem to be most deserving can get in. Only students who come from the right neighborhoods, the right families and have the right connections have the opportunity to make it through a college program unscathed.
This is a side effect of inequality, which has infiltrated the education system in America. Rather than using the colleges and universities as a tool to further personal and societal growth, schools are now status symbols for the few who can afford them. The rest spend their entire lives working hard to pay back what they had to borrow, plus interest.
Rather than being able to control the way Americans are educated, the rich should instead be committed to contributing to the further education for all Americans. Here are 10 reasons why the rich should be taxed to pay for free college education.
A Civilized Society Taxes the Rich
Only a few hundred years ago, the poor would pay huge taxes to the ultra- wealthy. The monarchies and governments of yester-year were made up of people who often literally owned the entire country. To pay for their lifestyles, they required capital. That capital had to come from somewhere, and it was easier to take it from the poor through taxation.
Flash-forward to the mid-17th century and the birth of the modern nation-state. Now, people pay taxes fairly. Certainly, struggling people are still forced to pay taxes. However, these taxes no longer go to a royal family that uses them to build summer homes and purchase foreign goods.
The hallmark of a civilized society is that people contribute taxes and in return, they get services back. The taxes you pay now buy you more than physical protection. This money builds roads, promotes innovation, helps give back to the poorest of the poor and builds for you a small retirement account.
In a civilized society, a healthy person will give up their chair so that a weak person might sit. Similarly, a rich person should give up their capital to help the poor. This must extend to education.
It is not enough to pay for healthcare or food. These things are essential but offer only a measure of subsistence. The rich must be taxed to help pay for free education because education works as an equalizer.
If you give a person a sandwich, they will be hungry again. However, if you send a person to school, they can learn the essential skills they need to make themselves and everyone around them a sandwich. Then, that person will have the tools they need to succeed in life.
The Desperate Type of Inequality America Faces Calls for Desperate Measures
The inequality that people face today is as desperate as it was several hundred years ago. Only a handful of people hold more wealth than almost the entire population of the world. This creates a society where some people can literally own the world while others are enslaved by it.
The economic inequality in the United States is often worse than people realize. Recent research published in Perspectives on Psychological Science suggests that if people had any real idea about how unequal American society is, they would riot in the streets.
At the current moment, 20% of American households are in control of 84% of American wealth. The bottom 40% of American households hold an even more shocking number: 0.3%.
However, this epidemic does not begin and end with wealth inequality. Income inequality is also a driving force in this epidemic. In another study, 55,000 people asked how much a corporate CEO earns compared to an unskilled worker. American responses said that the ratio was around 30-to-1 but that an ideal ratio would be 7-to-1.
The amount of money that Americans believe that CEOs make is closer to the ratio that was true 50 years ago: 20-to-1. In reality, American CEOs today make 354 times the amount of money that unskilled laborers earn.
However, Americans put up with it because they believe that someday, they can be that CEO. They do not consider that this inequality is so ingrained in society that it is almost inescapable, except for the very lucky few.
The reality is that the population of the United States is now more unequal than any other Western country. There is far less social mobility available to the American public than there is to the Canadian and European publics. This keeps the poor and the middle class down and allows the rich to hold onto their positions comfortably.
Education is one of the ways that Americans could vastly improve their social mobility and their inequality. European countries offer universities that are free and almost-free. Some European countries even pay students to go to university by supporting their efforts with government bursaries.
If the American government could mandate free education for students across the country by paying for it with taxes, it would be able to shake free social mobility and allow more Americans to prosper.
Poor People Pay More Tax than the Rich Overall
There is a lot of confusion surrounding taxation in the United States. The rich want you to believe that they pay all of the taxes in the United States. They say that even though they are given tax breaks, they are the most important tax payers in America.
Wealthy Americans pay federal personal income taxes. This means that they pay tax to the federal government based on the amount of income they bring in every year. However, they do not pay all of the tax. Federal personal income tax amounts to only 28% of all of the tax collected by the government.
In 2012, the federal, state and local governments across American brought in $4 trillion through taxation. Only $1.1 trillion of that came from wealthy people through the personal income tax.
The rest of that money comes from payroll tax, sales tax, property tax, state income tax, excise taxes and a long list of other different types of taxation. These taxes are paid by everyone, including the poor. Out of all of these state income tax and sales tax can be the most crippling for the poor.
Recent studies have shown that state and local tax systems are unfair to the poor because many states do not have graduate personal income tax systems. This means that the state will tax every person at the same rate on their income. In 10 of these states, the bottom 20 percent of the population pay almost seven times more of their income than wealthier residents of the states.
All of this information means that the rich are not paying their fair share in taxes while the poor are burdened with more tax than they can handle. When this happens, the poor and struggling must part with money that they cannot afford to part with. The result is that they are cut off from services that they need because they simply cannot afford them.
If the rich were to pay a higher portion of the taxes, they could both relieve the tax burden on the poor. What is more, they could also use these taxes to pay for college so that everyone would have equal access to services like higher education.
Corporations Do Not Pay Enough Tax
The rich people in America are often rich because they are the owners or major share-holders in large corporations. From these corporations, they receive substantial salaries as well as other benefits like stock options However, America’s wealthiest people also hide their money away in corporations. This money often goes unnoticed and untaxed because it is easier for corporations to hide their money away.
In 2013, some of the biggest American multinational companies hid away $206 billion worth of profits in accounts held offshore. This brought up the amount of profits that the American government cannot tax to $2 trillion.
Just as in personal wealth, the biggest 22 companies out of 307 with holdings offshore held more than all of the other companies combined. General Electric, Microsoft, Apple, IBM, Google and Pfizer are some of the biggest culprits. These companies are not just steadily throwing money into overseas accounts. Google, Apple and Microsoft are accelerating the amount of money they put overseas.
The government cannot really do anything about it. These companies and their owners work with legal loopholes and complicated financial systems to ensure that they are not penalized for doing so. Plus, many politicians argue that forcing corporations to pay more taxes hurts the economy. Yet, there is no evidence that this has ever been true.
In reality, companies that pay more in taxes create more jobs for Americans because it actually limits their tax bill. These companies could be forced to pay higher taxes which could then be spent on free education for everyone. In turn, companies would be able to hire well-educated staff to fill the jobs that they created jobs for.
This would benefit the economy by driving innovation and ensuring that there are not huge shortages in essential and basic skills.
Wealth Is Not Distributed Because It Is Often Inherited
Wealth is not meant to be hoarded. It is meant to be distributed. However, wealth is more often inherited than broken up and dispersed. This creates families like the Walton family.
The Waltons are one of the richest families in America. This does not mean that they have a lot of money. The Waltons are a special kind of rich. The Walton family has more money than the combined wealth of 42% of American families. There are six members of the family on the list of world billionaires.
When you have this kind of money, you are not just rich. You are powerful. This power comes from controlling such a huge amount of capital. You also find that you have a small amount of control over the economy as a whole.
When a member of the Walton family dies, this power does not die with them. The capital they have is passed on to those of their choosing, often close family members. Along with that capital comes the power of sitting on a board, making decisions and being in direct control over the jobs of 1.4 million Americans.
This is a huge problem because it eliminates social mobility from the mix. It is impossible to break up this wealth and power when it is handed down to a new generation.
Fortunately, there is something that the government can and must do to prevent this.
Inheritance tax is a tax that can be used to prevent huge swaths of capital from being handed from father to son. Inheritance tax can be used to not only prevent these elite families from preventing social mobility. It can also be used to fund free education in order to provide equal opportunity on the other side of the scale.
Free College Education Betters America
Free college education is better for the entire country. Data shows that countries that have more people who have been educated to a high standard are generally better places to live.
Education teaches people how to be more thoughtful citizens. It teaches them to think critically about what is happening around them. Essentially, it teaches them to complain more and to fight for better governance and better services.
As the level of education in the country rises, more people complain about misconduct. They report people who ask for bribes. They insist that paid officials and teachers show up to work. They do not stand for abuse of power.
An educated public creates a better place to live. This alone should encourage the government to better appropriate tax funding to make education free.
A More Educated Population Translates into an Educated Workforce
Doing manual labor is hard. Fortunately, this is now a world where it is not always required. Technology has allowed many industries to automate these jobs which frees companies from having to hire human workers for many tasks. However, the idea that human workers are not needed is wrong.
This is wrong first because technology breaks frequently. It is essential to have people on hand to fix this technology. However, human workers are needed to do more than manually fix things. They are needed for innovation.
Innovation comes from people who are educated. Without higher education, people do not learn the foundations of sustainable innovation. America needs innovation and both the wealthy and the government thrive on it. Thus, it is they should make education free for everyone.
A More Educated Workforce Helps Create a Stable Economy
A more educated workforce helps translates into a more stable economy because it helps provide essential skills
A report titled “The Skills Gap in U.S. Manufacturing 2015 and Beyond,” suggested that out of three and a half million jobs in manufacturing to be opened over the next ten years, most of them will go unfilled. This is because of a huge skills gap in the manufacturing sector. In fact, the number of people who cannot perform basic or specialized manufacturing skills will mean that 2 million jobs will remain vacant.
This is a big deal for the country that wants to keep unemployment down. If people do not have the skills to do the available jobs that are available, it hurts both American citizens and the economy. However, there is something that can be done to fix this.
One of the biggest disconnects that exists regarding free education says that higher education is not helpful for most of today’s workers. However, this is not true at all. A college education can also be a technical education. In fact, some of the most valuable college education programs available are technical programs that lead directly into jobs. Unfortunately, these programs are not available to all the people who could easily fill these roles.
The wealthy can be taxed to pay for college programs that help teach these skills. This is an excellent way of investing in training. This is more efficient than training people onsite because a college education does not only provide technical training skills. It also teaches students how to think, reason and communicate better. All of these skills make better employees and this kind of training would provide a huge return on investment for the wealthy, the students and the economy.
A Stable Economy Helps Make the Rich Richer
By providing educated workers in the work force, closing skill gaps and promoting innovation, the rich can help stabilize the economy. The truth is that a stable economy benefits everyone but the people who benefit the most are the ultra-wealthy.
Right now, the ultra-wealthy get rich at the expense of the poor and the middle class. However, the 2008 crash taught the world that this is not sustainable over the long term. The economy does not work that way and people will not allow it for much longer.
However, using a stable economy, the rich can grow their profits without having to hurt other people. They can create this kind of economy and governance by helping to educate their fellow Americans.
The Federal Government Profits from Not Taxing the Rich
The federal government has it all wrong when it comes to providing free education. Politicians with little economic experience say that higher taxation slows down productivity and sends jobs offshore. There is virtually no historical evidence that supports this claim. However, it does help their careers by ensuring that they receive donations from rich Americans.
However, the federal government profits in an even more direct way than this. The government profits heavily off the sale of student loans. Over the next decade, the United States Department of Education will generate $127 billion in profit from college loans.
Most of these profits will come from graduate loans. However, it does not matter where these profits come from. The government issues predatory loans to students without jobs and expect them to be paid back over short periods of time at interest rates that are far from favorable.
The only thing worse than the wealthy cutting off access to education is that the government enjoys a profit from it. For this reason, all profits must be cut off and education must be free.
A primary argument made against the premise of free higher education is that everyone has to pay for it. This is not true. Many of America’s colleges did not charge tuition until very recently. There are still some colleges where tuition is still free.
The reason that tuition is such a big problem for Americans is because the wealthiest people in the country have turned higher education into a commodity. Too many people benefit from the commoditization of education including the rich, corporations and the government.
What those groups do not realize is that providing free higher education could actually help them. Allowing everyone equal access to education will support innovation, a stronger economy and greater governance in the future.
The debate surrounding college education is at a make-or-break moment. The movement for rescuing higher education is on its last legs as millions of Americans are crippled with debt and are about to up on school. The rich could prevent this from happening if they would only pay their fair share of taxes.