Disclaimer: My #1 choice in the primaries is Kamala Harris but Warren is a very, very, very close 2nd for me.
I graduated at the top of class in 1995...so yes I’m old! At the time, I had my picks of schools. I was smart, great grades, good test scores, played two sports, a minority and a pretty sad sob story. So I applied. Ivy League, liberal arts, technical schools and the UC system. I got rejected from one: Harvey Mudd. When deciding, I really, really wanted to go to liberal arts school on the East Coast. There was one problem, the cost. I had been given a full ride for my 1st year and only my first year. After that first year the cost was 40K per year. This seems cheap now but back then...I was looking at 120K in debt at the minimum. I had enough money in scholarships to fund about half another year. So I didn’t go. I went to my local state school and it was amazing. That didn’t alleviate my funding issues but it gave me breathing room. I worked 2 jobs and lived below the poverty line. When I graduated, I had no fall back plan...Get a job and start paying off my loans. And I did.
I think student loans are out of control. I think interest rates on student loans are predatory. I think public school should be free. But I know that not all student loans are created equal.
The difference between Warren and Sanders:
Debt elimination:
Warren:
- Cancel $50,000 in student loan debt for every person with household income under $100,000.
- Provide substantial debt cancellation for every person with household income between $100,000 and $250,000.
- Not tax as income student loan debt that has been cancelled.
- Also make private student loan debt eligible for cancellation.
- Streamline the student loan debt forgiveness process using data and income information already available to the federal government.
Sanders:
- Everyone who owes a student loan would be eligible, regardless of their income or the type of loan they have. That includes parents who took out loans to pay for their children’s education
So what is my problem:
I’m going to use my husband (who will never read this diary). My husband went to a liberal arts college. His parents paid for it. He did work a job but the job was in the student run bar that his parents bought a “share in”. Basically he handed out free beer to all his friends once a week. And when he graduated, his parents sold the “share” for a profit. At graduation, his folks handed him a “secret” account which he could use for graduate school or a house. He chose business school. There was enough money in it that he could have gone to b-school debt free had he chosen to live a little frugally. He did not make that choice (this was pre-marriage). He graduate with debt. Debt, he still has. I say he, because I paid off my student loans YEARS ago by putting every extra dollar I had in those loans. He isn’t in a hurry because of his interest rate and as he loves to tell me it’s basically “free money”. Do you really want to give him loan forgiveness…. Sure you will DIRECTLY help me but dear lord does that man not DESERVE it. And frankly we don’t need the forgiveness.
My second issue is with the funding:
Warrens:
- Warren's campaign proposal included an Ultra-Millionaire Tax that would include a 2% annual tax on the 75,000 families in the U.S. who have at least $50 million in net worth.
Sanders:
- Adding a 0.5% tax on stock trades, or 50 cents on every $100 of stock, as well as a 0.1% fee for bond trades and a 0.005% fee on derivative trades.
Yeah...we are sticking it to Wall Street...except are we???? No, that tax on stock trades would be paid by the consumer...which is YOU. Before you say, that will never affect me...Do you have pension, a 401k, IRA, IRA rollover or a plan old stock account because if you do, you are directly paying for this tax. See that “tax” get’s passed down to you. Only invest in mutual funds...behind the scenes, those mutual funds are basically a bunch of stock trades and the cost of those transactions are passed to you in form of what the daily NAV is.
With Warren’s plan, she truly is sticking it to the 1%, with Sanders...not so much.
But the hedge funds...Hedge funds are part of the institutional class of investors but so are the following:
Pension funds, mutual funds, money managers, insurance companies, investment banks, commercial trusts, endowment funds, hedge funds, and also some private equity investors.
Institutional investors account for about three-quarters of the volume of trades on the New York Stock Exchange. Hedge funds account for about 8% of the market.
And by pensions, I mean teacher’s pensions, union member’s pensions, charitable foundations…
That isn’t how the tax works: THAT is EXACTLY how the tax works. We already have a tax on stocks. It’s called the SEC fee. It’s how the SEC is funded. The current SEC fee is the following:
The Securities and Exchange Commission today announced that starting on April 16, 2019, the fee rates applicable to most securities transactions will be set at $20.70 per million dollars
Basically, you pay of around .50 to a dollar depending on the transaction size per every stock sale you do and no Wall Street doesn’t pay this...you do.
It is true that Wall Street would be partially funding this tax as well. They trade internally for their own accounts. And for reasons that I won’t go into...you want them to trade. It gives the market liquidity.
So in turn, I prefer Warren’s plan. I think it also has issues but I think that in terms of fairness and basic appeal to the larger public, it has the right mix of practicality and usefulness.
Just a funny update: I just asked my husband if he heard about Sander’s plan and he said no. So I explained...He said...surely not for b-school loans...I said yeap...And then he said yeah but it will be means tested...and I said nope...And then he said...Oh, now I’m really not paying them off until the election is over.