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PaperclipPerfector  5mo ago (text post)   26564 thread views

Culture War Roundup for the week of June 3, 2024

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Is student debt forgiveness “buying votes” any more than tax cuts are? (I think both are bad at the current status quo).

Let's bring back stimulus check discourse.

Tax cuts represent income that was already earned, whereas student loan foreverness is more like a gift. But, agree they are similar in spirit

Would a student loan tax credit with identical bottom line implications be more legitimate than direct forgiveness?

No, but a reduction in marginal rates would. Lump-sum tax credits are basically welfare, with neutral or harmful incentive effects, while reductions in marginal rates have beneficial incentive effects.

The thing that's especially bad about blanket student loan cancellation is that it can't really be justified on either incentive or distributional grounds. That is, it doesn't encourage working harder or saving more, the way marginal rate cuts would, and it isn't targeted to people who are in particular need of help, the way traditional welfare is.

I think this is much worse for a few reasons:

  1. It was done unilaterally by the President without the authorization of Congress. It may even be unconstitutional.

  2. It was done in an election year, shortly before the election

  3. As opposed to tax cuts, which merely reduce one's obligation to the government, this is a gift. A person could have received this gift even if (in fact, especially if) they never paid any taxes at all

Obviously, vote buying is a spectrum and it's always part of the sausage. But this was an escalation, and the Republicans now need to match in kind.

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