Would Free College Work?

With the Democratic Primary debates underway, many young people are favoring Senator Bernie Sanders at this point in the process. Bernie has promised many programs such as universal healthcare and free public college/university education for anyone in pursuit of a degree, while also stating that he will erase all of the student debt in the country. 

 With all of these expensive promises, one might wonder, how will he pay for this?

Sanders plans to raise a tax on Wall Street for stock trades by 0.5 percent, which in theory will accumulate $2.4 trillion over the next ten years to pay for the estimated $2.2 trillion cost of free college, and student debt forgiveness. 

Though a 0.5 percent tax on stock trades doesn’t sound like much, if you put it in perspective, a person who invests $10,000 in the market will have to pay an extra $500 fee. This is five times the amount of what a person would normally spend on taxes in the market.

By creating this tax, a lot of traders and customers in the market will veer away from spending as much money as they usually do, potentially forming a void in the market that will cause a devastating effect on the economy.

A June analysis by the Tax Policy Center found that when Sweden and France introduced such taxes in 1984 and 2012, trading in those countries declined significantly. In the case, the tax “did lasting harm to the Swedish stock market,” the Washington, D.C. think tank said.

Meanwhile, housing for everyone would cost $2.5 trillion over ten years, and would be paid entirely by a “wealth tax on the top one-tenth of one percent,” raising a total of $4.35 trillion, according to Sanders’ fact-sheet. 

Even if Sanders was elected as the Democratic nominee and beats Trump in the election, would Sanders’s policies actually be passed?

With the Senate being majority Republican, it’s likely the Act wouldn’t be passed through majority. Sanders states he will try to pass it via Reconciliation, which requires 51 votes. The problem is, however, the Democrats might not have 51 senators after 2020, and getting those votes may be a stretch considering not all Democrats agree with his free college policy.

Since Sanders is in second as of now in delegates, closely behind Joe Biden, the Democratic race is going to be a tight one.

Free college is a noble pursuit and can be a reality in the future, but at this point in time, looking to gain funds by destroying the economy doesn’t seem smart.