November 19, 2015
Sen. Bernie Sanders and former Secretary of State Hillary Clinton, Democratic candidates for president, keep calling for the European model of expanded benefits. They just don’t tell us that it takes sky-high payroll and value-added taxes to pay for them.
For instance, Sanders reiterated his call for free college tuition in Saturday night’s debate with Clinton and former Maryland Gov. Martin O’Malley. Sanders said: “It is an extraordinary investment for this country. Germany, many other countries do it already.” Clinton is calling for free community college tuition, debt-free four-year college, and free federally funded universal pre-school.
Yet here in Germany, the payroll tax is 33%, more than double the 16% for the U.S. Plus, Germans pay a value-added tax of 19% on most products they buy. Residents in European countries that offer free tuition pay for the privilege out of tax dollars. It would be politically impossible in the United States to levy an additional 17% payroll tax and a 19% sales tax so that some can go to college.
Nor should all Americans be paying higher taxes for free tuition for some. As University of California professor Armen Alchian wrote in the 1970s, a college education is an investment that results in a stream of benefits in the form of higher earnings. Why should those without college educations pay for others to go when the uneducated will not reap the rewards?
Read the full article at Marketwatch.com: Free college tuition promised by Democrats is one big illusion