Cato Daily Dispatch for October 19, 2005
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Tax Overhaul Panel Presents RecommendationsHigher Education Tuition Rises Higher and Higher
Immigration Fix: Tighter Borders and Temporary-Worker Program
Tax Overhaul Panel Presents Recommendations
"The advisory panel appointed by George W. Bush to recommend changes to the Byzantine U.S. tax system will call for an end to taxes on U.S. companies' foreign profits, eliminating a competitive handicap for US businesses," reports the Financial Times.
"The proposal is part of an ambitious slimming down of the tax code proposed by the panel, set up by the president in January."
Chris Edwards, director of tax policy studies at the Cato Institute, had these observations about the Advisory Panel on Tax Reform: "The Panel's income tax reform plan would make some positive changes such as eliminating the double-taxation of dividends and treating U.S. businesses on a territorial basis with regard to their foreign profits. Both of these changes would increase U.S. business competitiveness and spur investment. However, on both the individual and business parts of this simplified income tax, the proposed top tax rates were still too high. For example, the proposed 32 percent corporate rate would still be higher than the 28 percent average corporate tax rate in Europe."
Higher Education Tuition Rises Higher and Higher
"Average college tuition grew more quickly than did overall inflation again this year, although the rate of increase slowed after a period of explosive growth, according to an annual survey released here Tuesday by the College Board," The New York Times reports.
"Annual tuition at public universities rose on average by $365, or 7.1 percent, this fall, after a year in which overall inflation was far less. Private universities increased tuition by $1,190, or 5.9 percent. Two-year community colleges increased tuition on average by $112, or about 5.4 percent, the survey said."
Cato education policy analyst Neal McCluskey argues: "As usual when the College Board releases its annual reports on college prices and student aid, the message the public gets is that tuition continues to skyrocket and aid just isn't keeping up. Don't believe it. According to the College Board's own numbers, tuition, fees, room, and board in constant 2005 dollars increased 42 percent at four year public colleges and 32 percent at four-year private colleges between the 1995-96 and 2005-06 academic years. At almost the same time, however, aid per full-time-equivalent student increased even more -- 62 percent between 1994-95 and 2004-05.
"These are the facts: Student aid coming largely from federal and state coffers is both fueling the tuition rocket and ensuring that taxpayers, not students, are paying the bill."
Immigration Fix: Tighter Borders and Temporary-Worker Program
"President Bush vowed on Tuesday to get tough on illegal immigrants even as he urged Congress to adopt a temporary-worker program that would allow some to remain in the United States for as long as six years," The New York Times reports.
In "Legalization is the Way," Dan Griswold, director of the Cato Institute's Center for Trade Policy Studies, writes: "Enforcing the existing law has failed. Since the 1980s, we've quintupled spending and tripled personnel at the Mexican border. We've built three-tiered walls for dozens of miles into the desert. We've imposed sanctions on employers for the first time in U.S. history. But the crackdown has failed to address the underlying realities of the U.S. labor market."
Kristen Kestner, editor, kkestner@cato.org
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