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Economy, Regs, & Taxes

Take From the 'Rich,' Give to 'Poor' College Kid

Elizabeth Warrens wants student loan refinancing funded by the Buffett Rule.

May 12, 2014

It’s May, which means it’s time for graduations. And for college graduates, that means looking for jobs in a stagnant economy in hopes of being able to pay back astronomical student loans. Finding a job will be even harder to do if Democrats succeed in raising the minimum wage. They’ve already made it more difficult by passing ObamaCare and raising taxes on small businesses.

A part of Democrats’ agenda comes courtesy of Sen. Elizabeth Warren (D-MA), who is pushing a bill to allow people to refinance student loans. “When interest rates drop, people can refinance their home, they can refinance their business debt. It’s regarded as a smart move for any consumer or business. But student borrowers are prohibited from doing that under most programs,” Warren said. “This bill says we’re going to change that and let them refinance that down to current low rates.”

Warren noted a Government Accountability Office (GAO) report from January showing that, on loads issued between 2007 and 2012, the government would rake in $66 billion in profit via interest payments. But she says its “just plan wrong” for the federal government to profit off of student borrowers, adding, “This is $66 billion on just the loans issued during that period. That is insane. This [bill] brings that down. Instead of taxing students who can’t afford to pay for college up front, it says we are investing in those students.”

The federal government should out to get out of both sides of the equation. Currently, the government subsidizes the bastions of leftist ideology known as colleges and universities, as well as controlling the student loan industry. That market manipulation is a primary reason why tuitions are skyrocketing. (Sound familiar? Health care, energy, etc.)

But it’s also funny that Warren would so quickly “give away” that federal revenue. Leftists generally operate on the assumption that all money belongs to the federal government and they generously allow you to keep some of it. How will the federal government “afford” to let students refinance?

That’s an easy one: Tax the rich. Specifically, Warren wants to enact the so-called “Buffett Rule,” which is Barack Obama’s idea to make millionaires pay their “fair share” of at least 30% in taxes. Of course, Warren Buffett, the billionaire namesake of the proposal, has his own rule: “I will not pay a dime more of individual taxes than I owe, and I won’t pay a dime more of corporate taxes than we owe.” But that’s another story.

Sen. Warren illustrated our point about who the money belongs to when she said, “Basically, the way I see it, there are billions of dollars here that flow out of the U.S. Treasury to a tax loophole, that are [sic] available to millionaires and billionaires.” See? That money isn’t theirs; the federal government is giving it to them through a “loophole.” She went on, “This bill says to use that money to reduce the interest rate on student loans. So it’s a pretty direct choice – should America be investing billions of dollars in tax loopholes for billionaires or investing that money to help young people who are trying to get an education? I think spending should be consistent with our values.” Coerced redistribution is a bad value.

But at least Warren is talking refinancing. Barack Obama’s plan is debt forgiveness. On the backs of taxpayers. Naturally.

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