According to a recent report, the eight richest individuals in the world have as much combined wealth as the poorest 50 percent. In other words, at a small inconvenience to eight inordinately rich men, the living standard of half of the world’s people could be doubled.
In fact, new research by economist Thomas Piketty shows that over the last 30 years there has been zero growth in the income of the bottom 50 percent while income of the top 1 percent has tripled. During the same period, the price of tuition, room and board at an average public four-year college, according to the Collegeboard, increased from $8,160 to $20,090, adjusted for inflation.
Average public college students and their families have found it almost exactly five times as hard, financially, to go to school as they did 30 years ago. If nothing is done about this inequality, which seems to be the case based on President-elect Donald Trump’s platforms and proposed tax policy, our siblings and even our children will be dealing with the same issues, which are likely to get even worse.
That’s why during these troubling times, liberal states need to take charge and serve as a counterbalance to Trump. California in particular needs to maintain and even extend financial support for students to pursue higher education – the “great equalizer.”
Under Trump’s plans, this dire inequality may grow much worse. For instance, he wants to abolish the estate tax, which will remove taxes on $2.1 trillion worth of inheritances over the next 20 years – a sum larger than the gross domestic product of India, a country of 1.3 billion people. Without taxing this income, a small number of heirs will become inordinately rich through no work of their own, further widening the gap between rich and poor and undermining the meritocracy this country stands for.
Furthermore, Trump’s plan for tax cuts consists of reducing the top marginal rate from 39.6 percent to 25 percent, eliminating the tax on investment income of high-income households and reducing the corporate tax rate to 15 percent from its current 35 percent. This in a world where, according to Oxfam, the 10 largest corporations had as much revenue last year as the 180 poorest countries.
Overall, the tax code under Trump’s plan will be much less progressive than the current tax code. More than one-third of the proposed tax cuts on personal income will go to the top 1 percent of income earners, with the average taxpayer in this group receiving a reduction in their tax bill of $275,000. Taxpayers in the bottom 99 percent of income earners will receive a tax cut of less than $2,500. To be clear, the bottom 99 percent of earners will include nearly every single UCLA student once they enter their first job.
According to the Tax Policy Center, Trump’s proposals would reduce federal revenues by $9.5 trillion over its first decade. Unless they are accompanied by very large spending cuts, they could increase the national debt by nearly 80 percent of the gross domestic product by 2036. In terms of its macroeconomic ramifications, Moody’s Analytics ran the numbers and concluded that, if taken at face value, the result would be an unusually lengthy recession—even longer than the Great Recession.
Not only is this bad for the economy, it is especially troublesome for students. In the words of Lee Ohanian, a UCLA economics professor, “(Trump) has proposed large tax cuts, but very little in the way of spending cuts. This means that the federal debt will grow, and today’s college students … may be facing significantly higher tax rates during their prime earning years.”
Even if Trump does manage to cut spending the necessary amount to offset the loss in tax revenue, this will leave the country in even greater inequality. Those hit hardest by those unlikely spending cuts will be poor people who rely on government programs to survive. Ultimately, with Trump, it’s a lose-lose for students and recent grads. Either he cuts spending along with taxes and inequality gets much worse, or he doesn’t and inequality still gets worse and students and recent graduates will have to pay very high taxes to offset the massive debt that will result.
With Trump at the helm, it is ultimately up to the citizens of liberal states like California to push for measures that counterbalance the mistakes he will make during his time in office and implore the state to support its most vulnerable residents.
One immediate way for the state to demonstrate its support for less affluent students would be to preserve the scholarship for middle income students that Gov. Jerry Brown is currently considering cutting. According to the New York Times, UCLA enrolls the most low and middle-income students of any elite university. This means that out of all the top schools in the nation, UCLA is the place for the low and middle classes to make their voices heard. The student body must make it clear to the UC administration and California state government that this is the worst possible time for scholarships to be cut.
It is the overwhelming sentiment among students that Trump is president now, and there’s nothing to do but wait and see what happens in his administration. But this is the worst time for political apathy. Now more than ever, the campus needs to mobilize to get state legislation passed that will help those that will be worst hit by the coming storm.
Some students may prefer to focus on their own well-being before that of others, but they must keep in mind that as they enter the workforce, they will be part of that subsection of the population adversely affected by President Trump.
Students have nothing to lose but their student debt and grim-looking future.
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Read more Daily Bruin coverage of the presidential inauguration, along with analysis of California and federal policy under the Trump Administration:
