Free public college for all, as proposed by Senator Bernie Sanders
There is a summary of Senator Sanders' legislation, which was actually introduced back in May of this year (not recently as the media would have us believe) available on the web. Summary of College for All Act
In an interview with CNN's Wolf Blitzer, Senator Sanders was asked how this government largess would be paid for. His response was, "“A tax on Wall Street speculation, and that’s exactly where it should come from." When Mr. Blitzer pressed and asked Senator Sanders, "so you want to raise taxes?" Senator Sanders fired back, "on the very wealthiest people in this country, absolutely."
As always, that pesky devil is in the details. If you are single and your modified adjusted gross income (MAGI) is more than $50,000, you will be paying a new tax on any transaction where you sell a stock and the transaction is valued at more than $100. If you are a taxpayer whose filing status is married filing jointly and your MAGI is more than $75,000, the same transaction tax applies to you.
Sure it's only 1/2 of 1% of the amount involved but if you're a day trader, that's going to get real expensive over time. Especially since this tax has nothing to do with whether or not you are selling at a profit. If you bought $1,200 worth of a stock and you're selling it for $1,000 (a capital loss of $200), you're paying a transaction tax of $5.00 to fund this college program. The kinds of investments that the truly wealthy are engaged in, the derivatives will only be taxed in this way at a rate of 1/200th of 1% of the amount involved. Those in the middle class who are engaging in day trading to try to become wealthy are going to find that much more difficult under the plan promulgated by Senator Sanders.
Then there's the issue of the unfunded mandate in this legislation. Seems that Senator Sanders wants states to bear a full 1/3rd of the cost of eliminating tuition at public colleges and universities. Let's look at that for a moment. UCLA currently estimates the cost of 9 months of in-state tuition as being $13,251. The state is already providing funding to lower tuition to that level. Now Senator Sanders wants the state of California to pay an additional $4,417 per student toward the cost of a UC education. As of 2013, according to the Statistical Summary and Data on UC students provided by the UC administration, there were 183,498 undergrad students in the UC system.
I'll do the math for you. The program to make public universities and colleges free to all introduced by Senator Sanders is going to cost the state of California $810.5 million dollars a year, just for the UC system. Add in the Cal State and junior college systems and our state budget will be getting yet another billion dollar unfunded mandate from the federal government. States will have to raise taxes to pay for their share of this federal generosity.
Funny how an analysis of the bill's text reveals just how different it is from the one page summary provided by the campaign and legislative staffs of Senator Sanders. Wait, I forgot another detail. This bill also mandates that five years after this bill becomes law, at least 75% of all instruction provided at public colleges and universities must be provided by tenured or tenure-track personnel. Now those who don't like the system of adjunct professors will like this profession. Colleges and universities who will be forced to hire and maintain more tenured and tenure-track instructors, raising costs.
It also requires public colleges and universities to provide students who receive the maximum amount under the Pell Grant program with financial aid covering 100% of the difference between the cost of attendance and the sum of the Pell grant amount and the parent's expected financial contribution. Another hidden gem in this bill that will drive financial aid officers up the wall in trying to manage limited financial aid budgets to maximum effect. Sorry guys and gals, no more "gapping."
One last little detail is that the Secretary of Education must work with the Secretary of the Treasury to provide direct access to IRS records for a "random sampling" of student and parent tax returns in order to verify incomes and ensure that under the bill's new one FAFSA application proposal that no significant change in circumstance has taken place. Of course, the bill calls for protection of this data but that's a crock.
I can't support this nonsense.
In an interview with CNN's Wolf Blitzer, Senator Sanders was asked how this government largess would be paid for. His response was, "“A tax on Wall Street speculation, and that’s exactly where it should come from." When Mr. Blitzer pressed and asked Senator Sanders, "so you want to raise taxes?" Senator Sanders fired back, "on the very wealthiest people in this country, absolutely."
As always, that pesky devil is in the details. If you are single and your modified adjusted gross income (MAGI) is more than $50,000, you will be paying a new tax on any transaction where you sell a stock and the transaction is valued at more than $100. If you are a taxpayer whose filing status is married filing jointly and your MAGI is more than $75,000, the same transaction tax applies to you.
Sure it's only 1/2 of 1% of the amount involved but if you're a day trader, that's going to get real expensive over time. Especially since this tax has nothing to do with whether or not you are selling at a profit. If you bought $1,200 worth of a stock and you're selling it for $1,000 (a capital loss of $200), you're paying a transaction tax of $5.00 to fund this college program. The kinds of investments that the truly wealthy are engaged in, the derivatives will only be taxed in this way at a rate of 1/200th of 1% of the amount involved. Those in the middle class who are engaging in day trading to try to become wealthy are going to find that much more difficult under the plan promulgated by Senator Sanders.
Then there's the issue of the unfunded mandate in this legislation. Seems that Senator Sanders wants states to bear a full 1/3rd of the cost of eliminating tuition at public colleges and universities. Let's look at that for a moment. UCLA currently estimates the cost of 9 months of in-state tuition as being $13,251. The state is already providing funding to lower tuition to that level. Now Senator Sanders wants the state of California to pay an additional $4,417 per student toward the cost of a UC education. As of 2013, according to the Statistical Summary and Data on UC students provided by the UC administration, there were 183,498 undergrad students in the UC system.
I'll do the math for you. The program to make public universities and colleges free to all introduced by Senator Sanders is going to cost the state of California $810.5 million dollars a year, just for the UC system. Add in the Cal State and junior college systems and our state budget will be getting yet another billion dollar unfunded mandate from the federal government. States will have to raise taxes to pay for their share of this federal generosity.
Funny how an analysis of the bill's text reveals just how different it is from the one page summary provided by the campaign and legislative staffs of Senator Sanders. Wait, I forgot another detail. This bill also mandates that five years after this bill becomes law, at least 75% of all instruction provided at public colleges and universities must be provided by tenured or tenure-track personnel. Now those who don't like the system of adjunct professors will like this profession. Colleges and universities who will be forced to hire and maintain more tenured and tenure-track instructors, raising costs.
It also requires public colleges and universities to provide students who receive the maximum amount under the Pell Grant program with financial aid covering 100% of the difference between the cost of attendance and the sum of the Pell grant amount and the parent's expected financial contribution. Another hidden gem in this bill that will drive financial aid officers up the wall in trying to manage limited financial aid budgets to maximum effect. Sorry guys and gals, no more "gapping."
One last little detail is that the Secretary of Education must work with the Secretary of the Treasury to provide direct access to IRS records for a "random sampling" of student and parent tax returns in order to verify incomes and ensure that under the bill's new one FAFSA application proposal that no significant change in circumstance has taken place. Of course, the bill calls for protection of this data but that's a crock.
I can't support this nonsense.
posted by me at 9:06 PM
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