Calling it 7 days rather than a week doesn't change the situation.
It's going to come out of taxpayer's pockets.
No, nothing is
going to come out of the taxpayers' pockets.
The money was spent, in the past. It came out of the taxpayers' pockets then. It's a sunk cost.
Loan repayments to the federal government are themselves a form of taxation. Forgiveness is a tax cut.
It's going to come out of future taxpayers pockets.
No, it really isn't. It came out of past taxpayers pockets. It's done.
Forgiveness of the repayments is just a tax cut, targeted at former students whose career earnings haven't been as high as was originally anticipated. And it cuts their currently elevated tax rate back to the same rate that others with the same income currently pay.
It costs nobody anything that they haven't already paid at the time those former students were studying.
And when the taxpayer paid the cost for the student, it was with the student's promise to pay the amount back.
The whole point of income taxation is that everyone with the same income pays the same tax, regardless of what government services they might have accessed in the past. We don't charge people additional income tax because they commute more than average on interstate highways, or because they claimed SNAP benefits at some time in the past, or because they live in a place that was struck by a natural disaster and received federal assistance. We just look at income, and tax a percentage of that.
Unless they got educated at government expense, in which case we bizarrely demand that they pay extra taxes that other people with identical incomes do not.
That's just nuts.
"Nuts" is characterising loan repayments as a tax. It is not one.
Not to anyone who is even remotely economically literate. bilby is correct in that when the gov't forgives a loan repayment has the same economic impact on the borrower as a tax cut. The loan payment has the same immediate economic impact on the borrower as a tax payment.
I
n essence, bilby's argument rests on the implicit premise that any fees government-funded education should be income-based not service expense based.
bilby said:
Unless they got educated at government expense, in which case we bizarrely demand that they pay extra taxes that other people with identical incomes do not.
That characterisation is false and nuts. It ignores everything about how student debts are incurred.
I bold-faced and italicized the part of my response you clearly did not understand. If you did, you'd know your response is nuts.
No, your bolded and italicised part is irrelevant.
In Australia, university debts (that arise from course fees) are paid back through the taxation system and are income-contingent, like a tax.
But they are not a tax.
Neither are they a tax in America, whether they repayments are income-contingent or not.
Therefore, for bilby to say:
Unless they got educated at government expense, in which case we bizarrely demand that they pay extra taxes that other people with identical incomes do not.
Is fucking
nuts. We don't demand any such thing,
no matter how you falsely analogise an income-contingent debt being re-paid through the taxation infrastructure, and a debt to the government. Repaying a debt to the government is not paying "extra taxes".
Indeed, in Australia, it's already subsidised debt. Some course fees are almost completely covered by the government, and for courses that are not, they fees are heavily subsidised and the debt (the remainder of the fee) is not subject to interest but annual CPI adjustment only (to ensure the debt is not inflated away to nothing).