Shifting the Cost of Public Higher Ed
A reader of Stephanie Kraft’s article on the decline of public funding for higher education [“The Rising Cost of Opportunity,” February 3, 2011] might well come away feeling sorry for poor families whose children can’t afford higher tuition and fees. In fact, economists have found that shifting the burden from taxpayer to student has quite a different effect.
Because of the regressive nature of state taxation (e.g., sales taxes that the poor pay on higher proportions of their incomes and flatter income tax rates such as Massachusetts’s flat 5.3 percent rate) and the higher rate of participation in higher education among the wealthy, public funding actually shifts the burden of paying for higher education from the rich to the poor, with the middle class getting back only a fair share of the taxes they pay. It may well be that a particular student from a poor family is hard pressed to pay the higher individual costs, but the poor as a group actually benefit from a pay-as-you-go system and are hurt by a system funded by general state tax revenues.
If the goal is to fund higher education in a way that helps those who can afford it least, then the solution is full public funding from a steeply graduated state income tax that treats wages, salaries, inheritance, and investment income the same.
Paul Cherulnik
Leeds
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Who Owns the U.S.A.?
The Obama administration is spending our money at unprecedented levels and [the spending] is projected to continue for years into the future. Our annual federal deficit is approaching $1.5 trillion and will probably hit $2 trillion before long. Our national debt is projected to go from $14 trillion now to $25 trillion in five to eight years.
As of November 30, 2010 the following are the top 10 countries holding U.S. Treasury securities in billions of dollars:
Communist China, 896; Japan, 877; United Kingdom, 512; Oil exporters, including Venezuela and Middle Eastern countries, 210; Brazil, 184; Caribbean countries, 146; Hong Kong, 139; Canada, 135; Taiwan, 131; Russia, 123.
We are indebted to some countries who are potential adversaries and might be unfriendly to us in the future. They could decrease their purchases of U.S. Treasury securities, which would increase interest rates, or they could sell their U.S. securities, which would hurt the dollar and significantly increase inflation.
The U.S. administration and Congress have to rein in our current spending spree and reduce our deficits and the money we owe to foreign countries.
Harold Myerson, editor-at-large of American Prospect and the L.A. Weekly, in his article “Think Bigger, Mr. President,” has it right. He stated, “We need to either raise tariffs on unfair foreign competition or reduce taxes on companies that keep, bring or create jobs at home.”
Donald A. Moskowitz
Londonderry, N.H.
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“Risk Arrest With Us”
Last year, the people of Vermont used the democratic process to order Entergy Corporation of Louisiana to close its Vermont Yankee nuclear power plant in March, 2012. Instead of obeying the will of the people, Entergy is now spending vast sums of money on lobbying, TV advertising and lawyers to try to keep its dangerous, polluting nuke running until at least 2032.
I and at least four other people are planning to risk arrest for nonviolent civil disobedience at the Entergy office in Brattleboro at noon on February 28. We are asking the public to come out to support us and witness our action.
We will not damage any property, and we have notified the police. We will cooperate with the police if and when they arrest us. We will peacefully walk to the police cars and not say anything rude or confrontational to the police. We will consider allowing anyone to risk arrest with us if they contact us by February 21. I can be reached by phone at (802) 254-2531 or by e-mail by going to ValleyPost.org and clicking “contact.”
Eesha Williams
Dummerston, Vt.
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Estate Tax: Facts and Lies
The estate tax, in one form or another, has been an important source of revenue for the federal government since 1916.
Once again, the GOP is stepping up its calls to make tax cuts (for the rich) permanent, and are aggressively promoting a repeal of the estate tax. The estate tax, now dubbed the “Death Tax” by neo-conservatives, affects only the very richest of Americans—and then only the heirs of multimillionaires and billionaires. As if it really matters. The decedent is not affected at all by the estate tax, since he/she is now pushing up daisies—only his/her heirs may be affected by the estate tax.
I’m not so sure the overwhelming majority of Americans have any interest in perpetuating what has become an aristocracy of overwhelming wealth, power and influence. So one might ask, Why tax inheritors of large fortunes? Because [the tax] is still an important source of federal revenue. Conservatives deceitfully portray the estate tax as a death tax on small family-owned businesses. The fact of the matter is that fewer than 1 percent of the people who inherit an estate pay any estate tax at all, and half of the revenue from that tax comes from estates valued at $10 million or more.
As the estate tax law is now constituted, only an individual inheriting more than $5 million dollars (couples, $10 million dollars) will pay the estate tax. The current inheritance tax on estates is 35 percent, but only on the amount exceeding $5 million dollars ($10 million for couples).
The consequence of repealing the estate tax is this: the loss in federal revenue would be staggering—an estimated $680 billion dollars over the next decade. This loss of revenue, combined with the tax reductions on unearned income, is going to bring us to the point of no return; adding further to our national debt is unsustainable. We may have already reached that point of no return.
Paul G. Jaehnert
Vadnais Heights, Minn.
