Building an Economy that Works for Everyone

A Great Debate, Part III: Matt Bruenig Responds to Mike Konczal

This post is part three of a threepart debate of Pay It Forward that recently appeared on City University’s Graduate Advocate between bloggers Matt Bruenig and Mike Konczal. You can read parts one and two here and here.

Matt Bruenig

By Matt Bruenig, political and economic blogger on Demos’ Policy Shop and at

To respond to Mike Konczal requires first some clarification. One analogy that might make things clear is to that of single payer health insurance or Medicare. It would not seem difficult to impose a federal payroll tax on graduates in order to fund universities in the country. Add a box to the W-2, let the payroll software systems adjust, and you’re basically there. The tax would apply to all graduates, not just graduates of public universities, just as Medicare pays out claims to public and private hospitals. In this case, it would not matter if a private school chose not to participate. Its graduates could be taxed still, a specter which would force participation in any case.

With respect to rich non-attendees, it makes no sense to me why in particular they need to pay the graduate payroll tax. Their taxes should be extremely high in their own right, but subjecting them to the graduate tax seems to miss the main point here. College is income. College mobilizes social resources to some not others. Two individuals with nominally identical lifetime incomes (e.g. two rich people), one of whom received college and the other of whom did not, do not actually have identical lifetime incomes. College bestows a huge benefit onto its recipients. People really seem to enjoy going and it is quite expensive in resource terms. It does not seem unreasonable to include its value into the accounting of an individual’s distributive share for purposes of assessing distributive justice, something Konczal nonetheless resists.

With respect to externalities, I do not understand the import of the argument. Essentially, Konczal argues that college education trickles down, the upside of which appears to be that non-graduates would be moochers if they did not pay for those externalities they so enjoy. Like arguments for a negative capital tax, I do not find this particularly compelling. It runs upon an ad-hoc desert theory ethic that suggests each marginal economic move should have all its resulting value flow to the particular factor of production that is responsible for it. I do not know how you carry this out in practice or why it is ethically compelling. The $1 million college wage premium is, I’d say, more than enough reward for enduring what is, by many accounts, one of the greatest experiences of one’s life.

It is also essential to reiterate, and this is relevant to a number of Konczal’s points, that tertiary educational institutions are elitist, especially the selective ones, which also happen to utilize the most social resources. There is a kind of misguided populism that runs through these discussions, which is aspirational at best and delusional at worst. We know that the credential gates that stand in front of our institutions disproportionately select for the affluent, and I have yet to see anyone advocate tearing those credential gates down (something I’d actually be interested in exploring). With those credential toll booths up, these institutions are never–as Aaron Bady recently and unintentionally pointed out in a column in Al Jazeera–truly public. Everyone has nominally equal access to them, but some are more equal than others. No amount of sentimentality can sufficiently obscure the class reality of who these institutions do and will continue to serve given the status quo economic distribution.

Lastly, it deserves pointing out that Konczal and I are not actually very far apart on this. I propose free, tax-funded higher education. He proposes free, tax-funded higher education. I propose the tax we implement be a graduate tax. He proposes the exact same tax, except that the base include others as well, namely non-graduates. These differences are not so great, and with student-driven movements mobilizing in multiple states now in favor of a graduate tax, I’d imagine Konczal could find himself getting on board too, even if begrudgingly.

Via The GC Advocate

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