President Obama to propose 2 years of free community college for all students

[TuffaloDeac10]

Now, wealthy folks downzoning their neighborhoods to keep new development and Those People away while capturing rents from land appreciation? THAT'S some sickening dependence on government. I am against that.

 

[Deacon923]

So the ditch digging contracting company that hires subcontractors to dig the ditch, that isn't work? Howabout the lawyer that hires an outside firm for document review? The architect who hires an engineer to look at a particular systems design? That is the same process as someone hiring a third party to manage their investments. And if it is not work, then great, as none of the proceeds would be subject to income tax.

And the investment work is rewarded with preferential tax treatment because long-term investment is a massive factor in what drove our economy to the top of the world; furthermore, the gambling day trader is not given any such treatment, as his short term gains are taxed the same as the ditch digger's W-2s.

I mean, you're on a good track here, because a lot of economists would argue that the optimum rate of taxation on capital gains is zero due to the impact of the tax rate on consumption now vs. consumption in the future. The problem as a practical matter is that large disparities between labor and capital taxation provide huge incentives to transform labor income into capital income to take advantage of the lower tax rate. That happens legally, because the wealthy can hire lots of lobbyists, illegally, through outright tax cheating, and in the gray area of clever tax planning (which also generally is only available to the wealthy). It's pretty rampant in our economy, as you can see from CEO pay being structured as stock grants which the CEO can hold for a year and a day and then cash out at a lower rate, to the carried interest loophole, and the list goes on.

Probably the best solution is a consumption tax. That treats all income from all sources the same when it is spent, is much less subject to tax maneuvering by the wealthy, and captures illegal income. My ideal state, I think, would be a consumption tax coupled with a universal minimum income grant. That's probably the best way to finance the government, reduce the impact of lobbying, and protect the poor, with minimal government impact on the economy.

Given that the foregoing state of affairs is, to put it mildly, hugely unlikely to ever occur, I suppose we'll continue to argue over whether loopholes in the tax code are really government spending and whether getting lucky on a stock pick constitutes working.

 

[WFFaithful]

But let's be clear: it is your fault when the policies you advocate help lead to cyclical dependency. That is certainly your fault.

What happens if you lose your job and can't find another one besides McDonald's?
What happens if you get hurt on the job and can't work any longer?
What happens when you have a health crisis while unemployed?
What happens when....

There are many bad things that happen to good, hard-working people that they simply can't bootstrap their way out.

"Kick them to the curb, or they will become dependent!"

This line of thinking requires an incredibly sheltered view of the USA and is profoundly condescending to many Americans.

 

[Wrangor]

Still waitin on PH to inform me why 5700 is not enough money to pay for 4000. Lost in all this awesome drooling over our ideological differences is the reality that this supposed community college plan was nothing more than a political soundbyte that Obama never intended to do anything with. He was using it to control the dialogue, and it backfired on him because he funded it improperly. The truth is that it should have backfired simply because it was a useless idea. We already do what he was saying, and we do it more efficiently. As ONW stated (and a few others stated) we could do a better job of marketing what we already have, but what we already have is completely sufficient to cover any impoverished youth that desires a community college education and is willing to strive hard after it.

 

[jhmd2000]

What happens if you lose your job and can't find another one besides McDonald's?
What happens if you get hurt on the job and can't work any longer?
What happens when you have a health crisis while unemployed?
What happens when....

There are many bad things that happen to good, hard-working people that they simply can't bootstrap their way out.

"Kick them to the curb, or they will become dependent!"

This line of thinking requires an incredibly sheltered view of the USA and is profoundly condescending to many Americans.

Far better to tell them what you think that they can't do for themselves based upon your assessment of their potential, as discerned from a careful study of their race, class and gender; and that others must do for them from beneath the caring and responsive arms of The State. Because that's not condescending at all.

 

[WFFaithful]

Far better to tell them what you think that they can't do for themselves based upon your assessment of their potential, as discerned from a careful study of their race, class and gender; and that others must do for them from beneath the caring and responsive arms of The State. Because that's not condescending at all.

No one is forcing them to accept the help.

 

[jhmd2000]

I don't think I support any policies (at least not in the sense that they're my ideal policies) that cause dependency. UI could hardly do that as a 26-99 week program, and neither could Medicare-At-Birth. I don't think EITC or UBI or negative income taxation fit that bill. Bike lanes? C'mon, man! The Georgist land tax and zoning reform have nothing to do with dependency. And my favorite policy, workers seizing the means of production a la Anarchist Catalonia, is certainly not dependence on government! So I think you're lost.

Breaking news on a Friday...

The problem, dearest Tuffalo, is when the UI is extended past the original "earned" benefit, and becomes a daisy chain of dependency far beyond the "earnings" portion.

The real problem is that you think this ultimately helps people. In the long run, the evidence is clear enough that "something for nothing" checks end up three generations down the line with the frazzled liberals who championed their initial passage having to explain why entire swaths of our country are being left behind (spoiler alert: they don't think it's their fault!). Don't argue with me, argue with the fifth rotation of the dependency cycle you guys set into motion.

 

[jhmd2000]

No one is forcing them to accept the help.

I suppose one could say that that is true, but it is also true that there is a steady drumbeat of "You can't...", from compass points left. "The system hates you. You don't have privilege. We have to remind you that #yourlivesmatter. America is rigged for the wealthy and that ain't you. The other guy only got ahead because he's [insert demographic factor you're not] and he doesn't pay his fair share. Bootstraps! etc. You'll never make it, let us do it for you, it's not your fault (implied: that you can't)." If that isn't a toxic message, then I've never seen one (again, the truest test of your faith in this message is when you start raising your own children with it. Let me know what that is good enough for your (Royal "you", not Faithful by made-up-name) own family, and then I'll start to believe that you really believe it). Someone needs to explain to me the long-term success rate of "No, you can't." If you read the MILLIONAIRE NEXT DOOR and see what the average successful person looks like in this country, it isn't the 1% boogeyman that Elizabeth Warren promises to slay on behalf of that have-nots. The majority are first generation.

The rest of the world knows that there is a great deal of opportunity for upward mobility in this country. I wish some of the people who lived here also felt that way.

 

[PhDeac]

And plenty of information shows that people who live here are experiencing downward mobility.

Wrangor, I was the first person on this thread to express skepticism of the need to control the cost of what is already a lower cost open door community college education. As far as Pell Grants, if people aren't using them, maybe we need to do something different because they're not serving their purpose.

 

[TuffaloDeac10]

Breaking news on a Friday...

You obviously have no idea what you're talking about.

Many anti-poverty programs' disbursements aren't counted in poverty statistics. You have to look at adjusted stats including EITC and other income to get an accurate picture of the effects of war on poverty programs. And you'd have to decide whether to blame decreased industrial employment on unions, mayors, these programs, productivity increases, or increased competitive pressures from trade, or whatever. We're not dealing with the same pre-tax and transfer economy now that we were then.

Beyond that, your conception of the representative impoverished person being stuck in generational poverty is just not right. Half of households leave poverty within a year and 75% within four (as of 2009).

 

[WFFaithful]

I suppose one could say that that is true, but it is also true that there is a steady drumbeat of "You can't...", from compass points left. "The system hates you. You don't have privilege. We have to remind you that #yourlivesmatter. America is rigged for the wealthy and that ain't you. The other guy only got ahead because he's [insert demographic factor you're not] and he doesn't pay his fair share. Bootstraps! etc. You'll never make it, let us do it for you, it's not your fault (implied: that you can't)." If that isn't a toxic message, then I've never seen one (again, the truest test of your faith in this message is when you start raising your own children with it. Let me know what that is good enough for your (Royal "you", not Faithful by made-up-name) own family, and then I'll start to believe that you really believe it). Someone needs to explain to me the long-term success rate of "No, you can't." If you read the MILLIONAIRE NEXT DOOR and see what the average successful person looks like in this country, it isn't the 1% boogeyman that Elizabeth Warren promises to slay on behalf of that have-nots. The majority are first generation.

The rest of the world knows that there is a great deal of opportunity for upward mobility in this country. I wish some of the people who lived here also felt that way.

If anything the government does to help its citizens conveys the message of "You can't...," then we're all screwed.

The opportunity for upward mobility in this country is largely a myth. I could post some stats, but I'm sure you'd dismiss them immediately and blame it on single parent households and the cycle of dependency.

 

[smallbigtall]

This article is a great explainer on how 529 plans work (or don't work), who benefits the most, and the unsurprising reasons any proposal to remove a tax break that primarily benefits the wealthy is DOA. http://www.theatlantic.com/business/archive/2015/01/the-rich-the-poor-and-whether-tax-policies-live-or-die/384947/

"To summarize: If you’re poor, a 529 plan gives you nothing, since you don’t pay income taxes in the first place; the AOTC gives you $4,000 ($5,000 under Obama’s proposal) because you can take $1,000 of the credit per year even if you pay no taxes. If you’re in the “middle class” (making at least $74,900 and able to save $3,000 per year per child), a 529 plan gives you $5,800; the AOTC gives you $10,000 ($12,500 under Obama’s proposal). If you’re in the upper class, a 529 plan gives you $26,300; the AOTC gives you nothing."

The piece starts out by saying a 529 works like a Roth IRA, but the Roth IRA has MUCH more stringent contribution limits than the 529 in that you can't contribute anything to the Roth if your income is over $193K.

Disregarding any argument about simplifying the tax code, if the intent of this is to limit the advantages for the truly wealthy but still provide the middle class an option to encourage saving for higher education, why not impose income-based contribution limits similar (hell, identical) to that of the Roth IRA?

IMO this was DOA because it removed a tax break that is widely available for, if not wholly utilized by, the middle class, which is the opinion of myself, LK and others on this thread. If income-based contribution limits were introduced to phase out the upper class's ability to use 529s as a shelter, the proposal might very well still be on the table.

 

[jhmd2000]

If anything the government does to help its citizens conveys the message of "You can't...," then we're all screwed.

The opportunity for upward mobility in this country is largely a myth. I could post some stats, but I'm sure you'd dismiss them immediately and blame it on single parent households and the cycle of dependency.

You obviously have no idea what you're talking about.

Many anti-poverty programs' disbursements aren't counted in poverty statistics. You have to look at adjusted stats including EITC and other income to get an accurate picture of the effects of war on poverty programs. And you'd have to decide whether to blame decreased industrial employment on unions, mayors, these programs, productivity increases, or increased competitive pressures from trade, or whatever. We're not dealing with the same pre-tax and transfer economy now that we were then.

Beyond that, your conception of the representative impoverished person being stuck in generational poverty is just not right. Half of households leave poverty within a year and 75% within four (as of 2009).

Well, which is it? Mythology or probability? Tune in Monday for the exciting conclusion to find out!

 

[2&2 Slider To Leyritz]

And plenty of information shows that people who live here are experiencing downward mobility.

Wrangor, I was the first person on this thread to express skepticism of the need to control the cost of what is already a lower cost open door community college education. As far as Pell Grants, if people aren't using them, maybe we need to do something different because they're not serving their purpose.

Or it means that in general the people who truly want to go to community collage are already going, and those who don't aren't.

 

[jhmd2000]

Come on, jhmd. Are you also opposed to public highways & national parks? They have to be paid for, you know.

This is basically just an extension of public secondary education...which makes sense in this day & time to me.

So they're not "free", then?

 

[2&2 Slider To Leyritz]

I mean, you're on a good track here, because a lot of economists would argue that the optimum rate of taxation on capital gains is zero due to the impact of the tax rate on consumption now vs. consumption in the future. The problem as a practical matter is that large disparities between labor and capital taxation provide huge incentives to transform labor income into capital income to take advantage of the lower tax rate. That happens legally, because the wealthy can hire lots of lobbyists, illegally, through outright tax cheating, and in the gray area of clever tax planning (which also generally is only available to the wealthy). It's pretty rampant in our economy, as you can see from CEO pay being structured as stock grants which the CEO can hold for a year and a day and then cash out at a lower rate, to the carried interest loophole, and the list goes on.

Probably the best solution is a consumption tax. That treats all income from all sources the same when it is spent, is much less subject to tax maneuvering by the wealthy, and captures illegal income. My ideal state, I think, would be a consumption tax coupled with a universal minimum income grant. That's probably the best way to finance the government, reduce the impact of lobbying, and protect the poor, with minimal government impact on the economy.

Given that the foregoing state of affairs is, to put it mildly, hugely unlikely to ever occur, I suppose we'll continue to argue over whether loopholes in the tax code are really government spending and whether getting lucky on a stock pick constitutes working.

I agree, I have been on board with that type of system for years. That is a lot of what disappoints me about Obama ... he had the early political capital and momentum to ram something like that through that would have truly improved the system and made sense. Instead, he shot is load in the wrong girl and we got a disaster of a health program.

 

[Wrangor]

And plenty of information shows that people who live here are experiencing downward mobility.

Wrangor, I was the first person on this thread to express skepticism of the need to control the cost of what is already a lower cost open door community college education. As far as Pell Grants, if people aren't using them, maybe we need to do something different because they're not serving their purpose.

I would argue Pell Grants are serving exactly their purpose. Anyone with interest to pursue higher education has the ability to receive federal funding if they are impoverished. Any impoverished person who wishes to attend CC can do so tuition free + have a little pocket change left over courtesy of the US Government. At some point we have to expect and demand a person take control of their own education. The Pell Grant system is fine. It is the high school graduates that have been through our public education system and never been taught personal responsibility that is not. That is where the failure of our educational system lies. It starts young, and it continues through high school. Continuing to practice the same methods for 2 more years isn't going to move the needle one bit.

 

[Deacon923]

I agree, I have been on board with that type of system for years. That is a lot of what disappoints me about Obama ... he had the early political capital and momentum to ram something like that through that would have truly improved the system and made sense. Instead, he shot is load in the wrong girl and we got a disaster of a health program.

Back in 2008 there was a lot of posting about the Fair Tax and other tax reform ideas which seemed to have actual momentum in the political moment. I remember endless arguments with RJ about the Fair Tax. At the time, my conclusion was that some of the GOP candidates, if elected, might try to get something like that done (albeit not McCain, he never had that much imagination). There was never any reason to believe that Obama would do so. He never ran on that or anything remotely like it. So, I can't say I'm disappointed that Obama never pursued it, I concluded and remember posting back in 2008 that further boards discussion of a flat tax/Fair tax/consumption tax was pointless because the country had just decisively voted against that line of reform.

Just reminiscing of times gone by, not really on point with anything. Tax reform has been a unicorn for intellectuals on both sides of the aisle for 20 years now. It is a crying need that would really help the country. Sadly, the whole political system is completely stacked in favor of defending every single loophole to the hilt and against any kind of reform.

 

[PhDeac]

I think it's naive to think there wouldn't be loopholes to a consumption tax.

 

[jhmd2000]

I think it's naive to think there wouldn't be loopholes to a consumption tax.

It is naive to think that there shouldn't be loopholes to a consumption tax. People have to eat.