One of the things I try to stress to conservative boomers my age is the fact that, when we were young in the 1960s and ’70s, corporations paid something resembling their fair share of taxes, at least with federal taxes.
The federal corporate rate was graduated, with top rates on corporate income over $25,000 topping out between 48 and 52 percent. (It’s now 21 percent tops.)
And that system in the 1960s and ’70s seemed perfectly normal to everyone, and a lot of corporations just paid their taxes because there weren’t all of the overseas tax havens where corporations could claim a post office box in Malta as their headquarters.
(An aside: Malta had been effectively taxing foreign corporations at a rate of 5% even if their “headquarters” was a single-person office above a laundromat. Malta is being punished, at least for now, because of the way it encouraged these kinds of tax crimes. Great article here.)
The point of all of this is that, when corporations were good civic citizens, cities and towns and states had plenty of money to have people on their payrolls who were paid livable wages. Teachers weren’t paying for school supplies, schools had plenty of books and school nurses and guidance counselors and music/art programs. Public parks and street/bridge repairs were adequate to what was needed.
Public universities and colleges were well-funded by the state and federal governments and, in fact, got much of their operating budgets from public funds. So tuition was also low.
Then the Republican Party started to be taken over by right-wing billionaires who financed candidates and ad campaigns to convince Americans that corporate taxes were too high, that private sector workers were somehow inherently more efficient than government employees (they’re not) and that every dollar spent on government was a dollar that corporations could not spend to improve their profits that those corporations would magically “trickle down” to average workers.
Of course none of that money trickled down and today we know that record corporate profits end up nowhere remotely close to average workers, but instead make fabulously rich people even richer.
I bring all this up because my fellow boomers seems to forget how well government functioned before Ronald Reagan was elected. How much more fair it was– to everyone.
And once you realize how much better you had it than college students today, perhaps you can actually be happy about the things outlined in this CNBC article:
The day the Biden administration unveiled its highly anticipated student loan forgiveness plan was a “celebratory day” for Justin Short.
Short, 34, graduated from the University of Missouri in 2012 with a degree in hospitality management, $47,000 in federal student loans and $5,800 in private student loans. Like many borrowers, his college debt has plagued his personal and financial decisions for years.
So while he found relief in many of the announcements coming from the White House on Aug. 24 — $10,000 in debt forgiveness, another payment pause extension through the end of the year — Short was most interested in the announcement of proposed changes to income-driven repayment plans.
The Department of Education’s new plan would cap monthly payments on undergraduate debt to 5% of discretionary income, down from the usual 10% to 15% on existing plans.
The proposal also raises the amount of money considered non-discretionary income and shielded from being used to calculate student loan payments.
It would cover any accrued unpaid interest so that no borrower’s balance would grow if they made a qualifying payment.
And it would forgive loan balances after 10 years of payments, instead of the usual 20, for those with original loan balances of $12,000 or less
This “sleeper” detail of the loan forgiveness plan could be “a game-changer” for millions of borrowers with remaining balances, says Julie Peller, executive director at Higher Learning Advocates, a bipartisan higher education nonprofit.
“I wish people were talking about this more than the $10,000 piece,” Short says, “because this will put more money into the pockets of everyday, middle-class Americans who need that extra help, especially when student loan payments resume on Jan. 1.”
“This has huge implications,” he adds.
As I said earlier, college was cheap for most boomers who attended public universities. So cheap that student loans tended to be small — if you had one at all — and the terms favored students instead of the banks. Unlike today where even some student loan borrowers who pay regularly on their loans watch in horror as the principal barely goes down. (See this article about student loan borrowers who are now paying on student loans into their retirement years.)
If you had suggested to boomers when we went to college that we would have to borrow $100K or more, on terms that meant we would be paying until after we retire, we would have thought you were crazy.
So loan forgiveness seems like simple fairness to today’s students whose only real mistake is that they were born too late to benefit from the way things used to — and still should — operate.
Because, even those of us boomers who had students loans and paid them off were still recipients of government educational assistance. We just never saw it because it went to the universities and colleges to subsidize our low tuition.