I see that the Canadian Centre for Policy Alternatives has just released a new paper by Hugh MacKenzie called The Impact of Taxation on the Higher Education Debates. It’s worth a read because it sets out the argument against higher fees in the most respectable terms possible – certainly more respectable that anything student groups themselves have come up with.
It is still, however, a pretty crap argument.
The spiel runs like this: the lazy talking point about how higher education subsidies mean that “the poor pay for the education of the rich” isn’t actually true. Our system of income taxes is quite progressive; the top income quartile pays about 69% of all taxes and the bottom quartile pays for just one percent. As a result, on a net basis, the bottom income quartile gains from the current system because they make up more than 1% of all university students.
MacKenzie is dead on about this. It’s where he goes from there which is problematic. He continues by arguing that its OK that subsidies for education, on aggregate, end up disproportionately with the children of wealthy families, because on average, the wealthy pay most of the taxes. Effectively, he argues that as long as the top income quartile doesn’t claim more than 69% of the expenditures of any program, and as long as the lowest income quartile gets more than 1% of the expenditures, the program is ipso facto progressive. And since higher education meets that test, it’s OK to spend more money on it.
This, to put it mildly, is an interesting definition of the term “progressive”. Education Savings Grants, which mostly go to the rich, would be considered progressive according to this definition. So, too, would the Bush Tax cuts (h/t Stephen Gordon).
Surely the relevant issue isn’t whether public subsidies can pass an unbelievably weak test such as this. The issue is how to ensure that subsidies are directed to those who need them most. This of course is what most people who argue for subsidy reform argue; higher fees for the rich, lower net fees for the poor through increased grants. For McKenzie this option is never considered; whether through ignorance or deliberate omission, he never mentions the billion or so in student grants which permit this kind of pro-poor price-discrimination.
MacKenzie self-righteously claims that anyone who disagrees with his views on progressiveness is just “appropriat(ing) the language of fairness” while “arguing against public policies whose goals include equalization of opportunity”. So be it. If arguing against providing rich families with bigger subsidies because they pay more taxes makes me anti-progressive, I’ll wear that label with pride.
The question is – why wouldn’t CCPA do the same?
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You’re being way too easy on this one.
It’s more than a little ironic that a left wing group is using the right wing tactic of blithely asserting that income taxes constitute our entire tax system, but that irony doesn’t make it any more acceptable. In fact if you look at all sources of government funding, in particular taking some care to account for the tax systems of the jurisdictions doing the funding, I think most work in this area actually does find that universities are funded regressively. Certainly that’s what Meng and Sentance CJHE 1982 found and I’m not aware of any careful analysis to the contrary since, nor am I under the impression that the tax system has become noticeably more progressive in the meantime.