Public Universities and Marginal Tax Rates
William McGurn, writing in the Wall Street Journal, thinks that prior to Thursday "Day of Action to Defend Public Education" protestors and California education officials:
...might each profit from a review of the recent findings of the bipartisan California tax commission. The governor set up the commission precisely because the boom-and-bust cycle for state tax revenue is making it increasingly difficult for the state to fund government commitments, including higher ed. The gist of the problem was aptly summed up in its report: "Tax rates have been increased on steadily narrowing tax bases."
Tax bases narrow as marginal rates go up and people and businesses struggle to make a go of it. Some fail; others move to Texas. Either way, the result is what California has been seeing: higher unemployment, slower economic growth, and less tax revenue to fund the state's public institutions.
When things get as bad as they have in California, students whose education is underwritten by this tax revenue find themselves paying higher tuition—and faculty and staff may find themselves out of a job. To put it another way, it seems to be the case that a progressive public university system with the wherewithal to provide nurture and sustenance to its activist students and professors requires something for which they have thus far had little sympathy: a thriving petit-bourgeois to help pay for it.
So here's some advice for Thursday's protestors. Keep your clothes on. Don't fight the police. And maybe put down your Saul Alinsky long enough to read the California tax commission's findings about what dependence on high marginal income tax rates is doing to public universities like yours.
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