To review, Oregon has proposed implementing Pay It Forward (PIF), a higher education financing plan in which the state directly subsidizes all public college tuition (or college costs if you’d like). To fund the subsidies, people that attend college will pay an income tax after they graduate (e.g. 3% of their income for 24 years). I am a long-time supporter of the PIF idea because I think, as a philosophical matter, it’s more fair and just than college subsidies funded by taxing the general public (general public taxes = GPT).
When I waded into the debate, I thought (and still do) that the only real arguments available in the PIF v. GPT debate are tax arguments. Much to my frustration, these arguments have basically been buried by a flood of other arguments, many of which are literally wrong. However, I think the corner is turning in the debate and people are starting to see that in this debate there really are, as I have been insisting from the beginning, three kinds of arguments: 1) tax philosophy arguments, 2) tax incentive arguments, and 3) bad arguments.
If you think you have some other kind of argument, there is a rough four-step process you can use to determine whether, in fact, you do.
- State your argument in one conclusory sentence.
- Check hard to see if it is actually a tax philosophy argument (e.g. some group of people are paying more or less taxes into higher education than you think they should have to).
- Check hard to see if it is actually a tax incentive argument (e.g. some group of people will respond harmfully to PIF or GPT taxes).
- Check if you can swap out GPT for PIF (and vice versa) in your conclusory sentence, and the sentence still remains true.
If you can get through this process without triggering one of the checks, you have probably made a good argument about PIF v. GPT that is not about tax philosophy or tax incentives. I am skeptical that there are any, and have yet to find one in all my searching.
I’ve tried to explain in the meta-argument about PIF v. GPT that these two programs are seriously identical. The only exception is that PIF exempts non-attendees from the higher ed taxes while GPT does not. That’s it. That’s not to trivialize the difference. There are tax philosophy and tax incentive arguments that are relevant to that difference. There just aren’t any other kinds of arguments.
Despite my efforts, I have failed to convince very many of the wonks in this debate of the correctness of my meta-argument through these general proclamations. So instead, I will (as I did recently at Demos) just start knocking back a long list of arguments to hopefully show, by example, what I mean.
Argument: PIF taxes make individuals who utilize the federal PAYE system all the way to loan forgiveness worse off.
Response: GPT taxes make individuals who utilize the federal PAYE system all the way to loan forgiveness worse off. (fails checklist item 4)
Reason: PIF taxes only make individuals who utilize the federal PAYE system worse off because all direct tuition subsidies are worthless to them, but PIF taxes require them to contribute to the funding of those subsidies. But GPT is exactly the same: PAYE users get no benefit from the tuition subsidies funded by GPT, but still have to pay into GPT.
Argument: GPT taxes used to fund higher education subsidies are worth doing because they reduce the number of students who have to revert to the federal PAYE system, and reduce the debts of everyone who does not utilize the PAYE system.
Response: PIF taxes used to fund higher education subsidies are worth doing because they reduce the number of students who have to revert to the federal PAYE system, and reduce the debts of everyone who does not utilize the PAYE system. (fails checklist item 4)
Reason: GPT and PIF are both tuition subsidies. They both reduce non-PAYE debt totals. An argument in favor of one on these grounds is equally an argument in favor of the other.
Argument: GPT taxes used to fund higher education subsidies are worth doing because they generate externalities.
Response: PIF taxes used to fund higher education subsidies are worth doing because they generate externalities. (fails checklist 4). Alternatively, this externality argument is about the way in which non-attendees benefit from externalities and therefore GPT is fair (because it forces non-attendees to contribute to higher ed funding) while PIF is not fair (because it does not force non-attendees to contribute to higher ed funding). This alternative interpretation reveals a tax philosophy argument. (fails checklist item 2)
Reason: Clearly $1000 of PIF-funded higher ed subsidies creates the same externalities (if any) as $1000 of GPT-funded higher ed subsidies. So it’s the same. To the extent that this is a fairness argument about free riding non-attendees who reap the externalities without contributing, it’s a tax philosophy argument about who should contribute and who shouldn’t.
I could go on and on, but the post is already getting a bit unwieldy. If you think you have an argument that is not about tax philosophy or tax incentives, seriously see if you can get it through the four-part checklist. I don’t think you will, not because I have gone over every single argument ever, but because of the brute fact that PIF and GPT are not different in ways that allow any other kinds of arguments.
If I am right, the vast majority of the wonk discussion on this has been off the mark so far (at least in the way it has been presented).