Education & Taxes
Big changes are proposed in regards to how taxpayer dollars are being spent. In regards to higher education, multiple states are considering tuition free community college. Tennessee, Oregon and Minnesota have already passed laws to make this a reality. The state of Tennessee is using funds earned from the states lottery system to cover about $1165.00 per person for tuition. In Oregon, the state has set aside $10million so that students can go to college for two years free of charge. The requirements to qualifiy and maintain tuition free vary with some of the benchmarks being a maximum family income, minimum GPA standard and in state residency.
Republicans are unhappy about the proposed costs of tuition free community college while democrats are hopeful that this will be an engine of economic growth by lifting those without funds to become educated and active contributors to the economy.
In addition, private companies are also offering low cost or free educational programs that are making it easier for employers to train their employees. The private sector is disrupting the traditional university by offering free courses, digital access and flexibility of time. While academics and employers are not fully embracing a 100% online education, it seems that technology is a promising potential answer to rising student debt and suppression of millennials economic mobility.
Presidential Election Tax Proposals
While voters are watching the developing election this year, it is helpful to know where each candidate stands in relation to proposed tax plans should they win.
Hillary Clinton would like to see a 4% charge on people earning more than $5million a year. She’d also like to see a minimum 30% tax on million- dollar income earners with a 28% cap on itemized deductions. Finally she would also like to raise the federal tax rate to 45% on estates worth more than $3.5 million. Mrs. Clinton would like to see the extra tax revenue help pay for public college tuition and fund other programs aimed at the country’s middle class.
Donald Trump would like to see a reduction in the number of tax brackets, from the seven we now have to only three. These brackets would be 12%, 25% and 33% with a top rate of 39.6%. Along with this, he’d also like to heavily reduce corporate taxation from 35% to 15% and reduce the levy on capital gains. These changes would be made with the intention of stimulating the private sector economy but may also inadvertently raise the deficit or require spending cuts.
In the opinion of The Kiplinger Letter (an economic forecast newsletter), a new president is unlikely to proceed with tax reform any time soon. They argue that a Clinton presidency will result in the GOP blocking her in the Senate. They also argue that a Trump presidency will result in Democrats stopping his tax reforms in the Senate as well.
Kiplinger Letter Vol. 93 No. 32