Sen. Bernie Sanders (I-Vt.) and Rep. Pramila Jayapal (D-Wash.) on Wednesday introduced legislation to make college tuition free for millions of Americans, paid for by a new tax on Wall Street trades.
- The College for All Plan would make community college and trade school tuition free for everyone, and it would eliminate tuition at public four-year colleges and universities for students from families earning less than $125,000 per year.
- It would also make tuition free at private Historically Black Colleges and Universities and other minority-serving institutions for students from families in that income bracket.
- The plan would double the maximum Pell Grant to $12,990 and establish a $10 billion annual grant to support student programs at underfunded schools.
- The federal investments in education and tuition would be paid for with a separate bill called the Tax on Wall Street Speculation Act, which would levy a new tax of 0.5% on stock trades, a 0.1% fee on bond trades and a 0.005% fee on derivatives.
- This isn’t the first time Sanders has pushed for a financial transaction tax—he floated the idea during his presidential campaign in 2016 and introduced legislation containing the tax in 2019.
“While President Biden can and should immediately cancel student debt for millions of borrowers, Congress must ensure that working families never have to take out these crushing loans to receive a higher education in the first place,” Jayapal said in a statement.
$2.4 trillion. That’s how much the new tax on Wall Street transactions could raise over the next decade, according to a summary of the legislation. When the Tax Policy Center analyzed Sanders’ campaign proposal for a financial transaction tax (a plan he said would raise $3 trillion over a decade), it concluded that the proposal would only generate about $400 billion in revenue.
Not everyone is a fan of new taxes on Wall Street trades. “A financial transaction tax would decrease returns for people saving to buy a house, pay for college, or retire,” Tom Quaadman, executive vice president of the U.S. Chamber Center for Capital Markets Competitiveness, said in a statement reported by CNBC in 2019. “It would also make it more expensive for businesses to raise the capital they need to start, expand, and create jobs.”