Wednesday, January 21, 2015

What the President’s Tax Proposal Would Mean for Higher Education

The Chronicle of Higher Education
January 18th, 2015

Over the weekend, the White House announced a broad outline of the tax-reform plan that President Obama will lay out in his State of the Union address on Tuesday. While unlikely to gain much traction with a Republican Congress, the plan could help set the agenda for Democrats looking ahead to 2016. The plan would increase taxes on wealthy individuals and financial firms, and would offer new and expanded benefits to low- and middle-income households. It also has several direct implications for higher education.
Funding Free Community College. Earlier this month, the Obama administration unveiled a plan to offer two years of community college tuition-free to students who meet certain criteria through a partnership between the federal government and states. The administration estimated that doing so would cost the federal government $60-billion over 10 years.
Under the tax plan, proposals to increase the top capital-gains and dividends tax rate for high-income households, close a trust-fund loophole, and charge a fee to financial firms that borrow heavily would be used to pay for the community-college plan, among other things.

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