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
  • Funding young scientists
    Funding young scientists

    This month, Johns Hopkins University President Ronald J. Daniels sounded an alarm about the difficulty young science researchers have in obtaining the grant funding that they need to launch their careers. In an article in Proceedings of the National Academy of the Sciences, he noted that the...

  • A 'role model deficit' for young black men
    A 'role model deficit' for young black men

    Young men may imitate what they do see. They definitely will not imitate what they don't see.

  • Street policing doesn't belong in school
    Street policing doesn't belong in school

    In recent months, there has been a flood of video evidence of police violence in our communities. Earlier this week, a gut-wrenching video surfaced that shows a school police officer violently attacking three young girls inside one of our middle schools. The incident starts when one of the...

  • Marissa Alexander's out of jail, but not yet free
    Marissa Alexander's out of jail, but not yet free

    Marissa Alexander got out of jail last week, but she is not free. At best, she enjoys only a species of freedom, a defective freedom thatimperfectly resembles the real thing. 

  • The changing face of higher education
    The changing face of higher education

    We have been reading for some time now about the demographic shift that was occurring in the nation, but I don't think we in higher education have truly digested the impact it will have on our institutions. Two weeks ago, the Southern Education Foundation released a report, A New Majority,...

  • Obama sticks to his comfort zone
    Obama sticks to his comfort zone

    More than week after his State of the Union address, political observers are still trying to figure out what President Barack Obama's game is. That's because rhetorically and substantively, he seems to be in another world.

Comments
Loading