Free college AND a better Wall St? Sanders sees a way.

Sanders-021507-18335- 0004Senator Bernie Sanders has unveiled his latest policy proposal as part of his Democratic presidential campaign: Free public college, funded via a new financial transactions tax to discourage damaging Wall Street speculation. It’s a step up from his earlier pre-campaign proposal of cutting tuition only in half. Here’s a summary of his new plan:

Annual tuition costs at those institutions add up to roughly $70 billion, according to a fact sheet from Sanders’ office. The proposed legislation would require the federal government to compensate for two-thirds of that sum, with the states making up the additional third.
[…]
The federal funding for Sanders’s proposal would come from a tax on financial transactions. Stock trades, bonds, and derivative trading would be taxed at rates of 0.5 percent, 0.1 percent, and 0.005 percent, respectively. Supporters of the financial transaction tax […] say it is not only a progressive way to raise revenue but would also discourage dangerous levels of Wall Street speculation.

A recent report from economist Joseph Stiglitz and the Roosevelt Institute, intended to provide a comprehensive framework for reworking American economic policy, endorsed a financial transaction tax as a way to “penalize short-term traders and incentivize longer holding periods, thus reducing instability and encouraging longer-term productive investment.”

 
Unfortunately perhaps the biggest pitfall of this plan — though it is (abstractly) an excellent starting point for a negotiation in Congress — is its dependence on state governments for a third of the funding. Low-cost public colleges and university educations are already being demolished in the name of dogmatic tax cuts. This plan depends on somehow convincing dozens of states not to slash funding / hike tuition and fees for their public colleges. But it’s a lot better than nothing.

Related reading on…

How much would it cost to make public colleges free?
Corporate borrowing diverted to shareholders, not investment
Putting Finance Back in the Box
Stock market speculation
Billionaire stock speculation

Bill Humphrey

About Bill Humphrey

Bill Humphrey is the primary host of WVUD's Arsenal For Democracy talk radio show and is a Senior Editor for The Globalist. Follow him @BillHumphreyMA on twitter.
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