Wednesday, November 20, 2013

Let's not play hard hat versus hippie

Matt Bruenig has been on a jihad about free college. The subject annoys him. I’m not going to speculate about his motives, even though he does a lot of speculating about other people’s motives. His work is generally great, and I think I actually sympathize with some of the basic impulses behind his crusade.

I’m just going to point out as briefly as possible why he is wrong on his central point.  

I take Matt’s central point to be this:
If the class composition of college will not change in response to college being free (which I think historical and contemporary evidence suggests is the case), then making college free will primarily be a windfall for the disproportionately rich kids who will still be the ones in these college spots.

My simple observation is this. Whether or not that claim is true depends entirely on how such a policy is paid for. Rich kids will undoubtedly get a disproportionate share of the free college seats, but they’ll also probably pay a disproportionate share of the taxes.

Let’s be specific. Here is Matt’s chart:

The numbers are a little dated, but the reddish bars show college attendance rates for the generation of kids that was college-aged around the year 2000 (the “79-82” birth cohort). In that generation, 37% of kids from the highest-income families (the top quarter) attended college, but only 13% of those from the poorest families (the bottom quarter) did. In another chart, Matt shows that the net cost of college attendance is almost twice as high (1.85 times as high) for high-income students as for low-income students.

OK, so all of that definitely means if college were made free and there was no change in relative attendance rates, higher-income kids would get a disproportionate share of the benefits.

But what proportion of the costs would they pay?

The only source I know of that estimates the distribution of tax burdens for all levels of government (federal, state, local) is Citizens for Tax Justice. Here is their updated chart for 2013:

According to this chart, the highest-income quintile (the top fifth) pays 65% of all taxes, while the lowest-income quintile (the bottom fifth) pays 2%. (The numbers are about the same if you just look at federal tax data from the better-known Tax Policy Center.) These numbers aren’t strictly comparable with Matt’s college data since they divide the population into fifths rather than fourths.

But it doesn’t really make any difference, because the conclusion is clear. The total amount currently being paid out-of-pocket by the top quartile of college-going families is about five times the total amount currently being paid by the bottom quartile. But the top quintile is paying well over thirty times as much in taxes. (An apples-to-apples comparison of quartiles might knock that figure down to maybe 25 times.)

In other words, unless free college were paired with new taxes that were  far, far  more regressive than the current tax structure, it would represent a clear redistribution from rich to poor.

But that wouldn’t be the only benefit of free college. In fact, the reason I bring this up isn’t solely to cavil over statistics. The general style of Matt’s approach leaves me cold. He has a tendency to strip every question down to a single criterion: how many net consumption-units will the lowest income group have relative to higher-income groups. That’s an important question. But it’s only the overriding question when we're operating in the realm of an Internet Fantasy Policy game.

God knows I have nothing against talking about government policy. But let's not forget that writing out a policy proposal to squeeze out the maximum number of consumption-units for the benefit of the poor doesn’t actually benefit the poor at all -- any more than writing out a proposal for free college does, or, for that matter, having a Twitter flame war about privilege.

If consumption-unit-maximization for the poor is what interests you, the only way to get it is through a real-life politics in which the poor can create some social power for themselves. It should be obvious that systematically casting the interests and grievances of the poor in opposition to the interests and grievances of everyone else is exactly the wrong way to accomplish that.

UPDATE: For some further important points about taxes, see the comment below and my reply.


  1. Except that public universities are paid for by state taxes, which are generally are regressive, as your chart shows

    1. State sales and property taxes are regressive. But state income taxes are progressive, and the poor pay almost zero. Federal income taxes are quite progressive. Federal payroll taxes are regressive. Every specific tax is different, which is why I showed the numbers for *all* taxes taken together. I have never heard of anyone on the left call for funding free college with property or sales taxes. As I wrote, "unless free college were paired with new taxes that were far, far more regressive than the current tax structure, it would represent a clear redistribution from rich to poor."

      That said, I didn't even notice that CTJ broke out state/local vs. federal taxes on that chart until Matt pointed it out to me a minute ago. So I'll update this post telling people to note your comment and this reply.

  2. Yeah, I'd be curious to know that. California has somewhat progressive income tax, and a 6.5% state sales tax. I've not seen a breakdown of the numbers, so I don't know if the state taxes without local taxes are progressive or regressive. I suspect they are mildly regressive.

    Nobody on the left is calling for a property/sales tax funded free university education, true, but the system we have now is state university systems. And state+local taxes are regressive. Again, I'm not sure exactly what happens when you factor out local taxes. So if you are calling for free education, you are calling for free education with what is either a flat tax or a mildly regressive tax system.

  3. Hm, didn't realize Matt Bruenig was making the same point on twitter. Didn't mean to come at you from all sides.

    1. you might be interested in my follow-up post. for data on state/local tax distribution, see this: