Get unlimited digital access to baltimoresun.com. $0.99 for 4 weeks.
News Opinion

Why Republicans want to tax students and not polluters

A basic economic principle is that 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 should not put a tax on student loans.

Sounds pretty simple, doesn't it? Unfortunately, congressional Republicans seem 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. "I 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's no reason for that," said Rep. Virginia Foxx, Republican of North Carolina and the co-sponsor of the GOP bill.

Republicans estimate this would bring in around $3.7 billion of extra revenue over a 10-year period, which would help pay down the federal debt.

In other words, it's a tax -- and one that hits lower-income students and their families hardest. Which is why several leading Democrats, including Senate Majority Whip Richard Durbin, Democrat of Illinois, oppose it. "Let's make sure we don't charge so much in interest that the students are actually paying a tax to reduce the deficit," Mr. Durbin argues.

Republicans claim the president's plan is almost the same as their own. Not true. President Barack Obama's plan would lead to lower rates, limit repayments to 10 percent of a borrower's discretionary income, and fix the rate for the life of the loan.

Meanwhile, a growing number of Republicans have signed a pledge -- sponsored by the multibillionaire Koch brothers' political organization, Americans for Prosperity -- to oppose any climate-change legislation that might raise government revenues by taxing polluters.

It is officially known as the "No Climate Tax Pledge," and its signers promise to "oppose any legislation relating to climate change that includes a net increase in government revenue."

At least 411 current officeholders 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.

The New Yorker's Jane Mayer reports that 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 Americans for Prosperity.

Why are Republicans willing to impose a tax on students and not on polluters? Don't look for high principle.

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 have 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 $50 million on lobbying.

Meanwhile, the Koch brothers -- whose Koch Industries ranks among America's worst air polluters, according to Forbes Magazine -- have long been intent on blocking a carbon tax or a cap-and-trade system, which would cut into their profits. And they, too, have been donating generously to Republicans to do their bidding.

We should be taxing polluters and not taxing students. The GOP has it backwards because its patrons want it that way.

Robert Reich, former U.S. Secretary of Labor, is professor of public policy at the University of California at Berkeley and the author of "Beyond Outrage," now available in paperback. He blogs at www.robertreich.org.

Copyright © 2015, The Baltimore Sun
Related Content
  • Why are Americans so angry and divided?
    Why are Americans so angry and divided?

    It's no coincidence that we are experiencing both polarization and income inequality not seen since the 1920s

  • Mr. Obama's 529 brouhaha
    Mr. Obama's 529 brouhaha

    Rarely does a president flip-flop on an initiative presented in the State of the Union address as quickly as Barack Obama did this week. He reversed himself on 529 college savings plans on Tuesday, which was just seven days after his speech to the nation. Such a political miscalculation is...

  • Defeating Boko Haram
    Defeating Boko Haram

    The bloody attacks in Paris this month that left 20 people dead, including the three attackers, riveted the world's attention on the growing threat Islamist extremist groups pose to the democracies of Western Europe. Yet even as the French people were mourning their loss, an even more...

  • Under Armour police uniforms [Poll]
    Under Armour police uniforms [Poll]
  • Realizing a 'Greater' Baltimore
    Realizing a 'Greater' Baltimore

    Though people may describe the region around Baltimore City as "Greater Baltimore," area leaders — from government, business, non-profits and academia — could do more to fully embrace that term and develop the potential it implies. Doing so is a critical component for the...

  • Medicare 'quality indicators' diverge from quality care
    Medicare 'quality indicators' diverge from quality care

    Health and Human Services Secretary Sylvia Burwell announced this week that, through the Affordable Care Act (ACA), Medicare would be taking drastic steps to assure that doctors are paid not for visits and procedures, but rather for the value of their work. The Centers for Medicare and Medicaid...

  • Exercise: find the time for it
    Exercise: find the time for it

    The early-morning holiday shoppers of last month have been replaced at the mall by early-morning walkers, some of whom have begun new exercise regimens for the new year.

  • Baltimore's progress at risk
    Baltimore's progress at risk

    Mayor Stephanie Rawlings-Blake and other Baltimore leaders are mobilizing to fight some of the cuts in state aid to the city in Gov. Larry Hogan's budget. They're not alone among local leaders in objecting to the new governor's spending plan, but they have a strong argument that Baltimore is...

Comments
Loading