The Higher Education Fiscal Crisis Protects the Wealthy

Posted by: Peter Phillips Posted date: November 22, 2009 In: Media | comment : 1

UC Berkeley

Police are arresting and attacking student protesters on University of California (UC) campuses again. “Why did he beat me I wasn’t doing anything,” screamed a young Cal Berkeley women student over KPFA radio on Friday evening November 20. Students are protesting the 32% increase in tuition imposed by the UC regents in a time of severe state deficits. The Board of Regents claims that they have no choice. Students will now have to pay over $10,000 in tuition annually for a public university education that was free only a few decades ago.

The corporate media spins the tuition protests as if we are all suffering during the recession. For example, the San Diego Union Tribune November 20 writes, “These students need a course in Reality 101. And the reality is that there is virtually no segment of American society that is not straining with the economic recession. With UC facing a $535 million budget gap due to state cuts, the regents have to confront reality and make tough choices. So should students.”

Yet, the reality is something quite different. Our current budget crisis in California and the rest of the country has been artificially created by cutting taxes on the wealthiest people and corporations. The corporate elites in the US, the top 1% who own close to half the wealth, are the beneficiaries of massive tax cuts over the past few decades. While at the same time working people are paying more through increased sales and use taxes and higher public college tuition.

The wealthy hide their money abroad. Rachel Keeler with Dollars & Sense reports that over the years, trillions of dollars in both corporate profits and personal wealth have migrated offshore in search of rock-bottom tax rates and the comfort of no questions asked. Offshore banks now harbor an estimated $11.5 trillion in individual wealth alone, and were a significant contributing factor to the international economic downturn in 2008.

According to the California Budget Project, tax cuts enacted in California, since 1993, cost the state $11.3 billion dollars annually. Had the state continued taxing corporations and the wealthy at rates equal to those fifteen years ago there would not be a budget crisis in California. Even though a budget deficit was evident last year, California income tax laws were changed in February of 2009 to provide corporations with even greater tax savings—equal to over $2 billion per year. California is similar to the rest of the country where the wealthy and corporate elites enjoy economic protection through increased costs to working people.

Higher education has been cut in twenty-eight states in the 2009-10 school year and further, even more drastic cuts, are likely in the years ahead. California State University (CSU) system is planning to reduce enrollments by 40,000 students in the fall of 2010. The CSU Trustees have imposed steep tuition hikes and forced faculty and staff to take non-paid furlough days equal to 10% of salaries.

The students who are protesting tuition increases know they are being ripped off. They know that we are bailing out the rich with hundreds of billions dollars for Wall Street and massive budget cuts for the rest of us. The corporate media doesn’t explain to over-taxed working families how they are paying more while the rich sock it away.

The current economic crisis is a shock and awe process designed to undermine low-cost higher education, force labor concessions from working people and protect the wealthy. We need higher taxes on the corporations and the top 1%, combined with free public college education and tax breaks for working families. And, we must have a media that tells us the truth about inequality and wealth. A true economic stimulus increases spending from the bottom up not the top down.

Peter Phillips is a professor of sociology at Sonoma State University, President of Media Freedom Foundation, and recent past director of Project Censored.

Daily News at: http://censorednews.org

Validated News & Research at: http://www.mediafreedominternational.org/

Daily Censored Blog at: http://dailycensored.com/

Project Censored: http://www.projectcensored.org/

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About The Author

Peter Phillips

Number of Entries : 142

JFoster
Peter Phillips keeps writing the same, tired, throw-away lines. But his arguments lack any facts, so saying them over and over will never make them right.
Once again, here are some facts: The richest 1% of tax filers in CA pay nearly half of all taxes in the state, and the richest 15% pay over 80%. The reason why the rich have benefited from tax cuts is because they are ones who pay all the taxes already. State tax revenues have grown faster than inflation plus population growth in CA since 1990 but spending has grown even faster–the problem in CA is SPENDING, not taxes. California’s tax code has gotten MORE progressive over the last 15 years, not less (in other words, the rich are paying an even higher share than before).
State employees are a big reason for this out of control spending. CA has among the most expensive state government workers in the country. CA accounts for 9% of US state employees, but 12% of US state government pay! What’s more, CA taxpayers fund 55% of the budget for the CSU system (where Phillips works), versus an average funding level of 30% elsewhere in the US. The heavily unionized state education system has one of the highest per student spending rates in the US, and still gives us a quality of education for our children ranked 48th out of 50 states.
In other words, the UC and CSU systems are already the most heavily subsidized education systems in the country. The cuts being enacted and the tuition increases being implemented are a reality given a slow economy exacerbated by California’s pro-union spending increases and anti-business economic policies. Students are being asked to pay a little more of what is already a great bargain in education. If they don’t like it, let them drop out. Taxpayers–rich and poor–are tired of paying the educational costs of ungrateful students spending their days getting high and running around protesting issues they do not understand. How can students be getting ripped off when they are paying 45 cents for every dollar of education received….with the rest picked up by the California taxpayer? Please, just drop out, every taxpayer in the state would be better off. Every taxpayer, that is, except Prof Phillips and his union colleagues.
When the richest 15% pay 85% of the taxes, any tax cut is going to benefit them more in terms of dollars. In fact the state tax code has gotten MORE progressive over the same 15 years. So, as a proportion of taxes, and despite benefiting from tax cuts, the rich pay a greater SHARE today than they did 15 years ago.