Friday, December 18, 2009

The Undecided

The recent death of Paul Samuelson at age 94 has prompted me to reflect on my own educational journey.  Paul Samuelson as we know, was a Nobel Prize winning economist and was also the author of a long term best selling textbook that influenced me greatly at a critical time.  As a high school student and even in my first and second year in college, I was uncertain as to what field to pursue.  And there were even moments when I was unsure as to why I was pursuing higher education.  Then economics came into the picture.  I can’t even tell you why I registered for this course—I wasn’t even sure at the time exactly what economics was and I knew of no one in my circle of family, friends and acquaintances who were in the field.  As far as I was concerned, this was just another course, taken most likely to meet a requirement.

Monday, December 7, 2009

Taxing Higher Education

In a recent Pittsburgh Post-Gazette, there was an article on the very controversial higher education tuition tax proposal put forward by Mayor Luke Ravenstahl.  The proposal as it stands (even though there are now efforts to scrap the proposal) is a one-percent levy on tuition, labeled by the Mayor as a Fair Share Tax and designed to raise $15 million per year.  There is no question that many cities and many states are in difficult financial shape, and unlike the federal government, deficits are not an option.  But in plugging a budget shortfall, the negative impact of any tax increase or spending cut should always be minimized to the extent possible, both in an immediate as well as in a longer term sense.  For example, instituting a tax on preventative health care would be a mistake in the moment and  the future but having that same (or a greater tax) levied on purely cosmetic surgery might be a good luxury tax revenue source.  It should be clear to everyone that creating an added barrier that will prevent some individuals from visiting their doctor is very negative and results not only in more work days lost (impacting business), more costly health care expenses in the future (for the individual, for insurance companies, and for government) and more needless deaths.  On the other hand, reshaping a part of your body or having a tuck here or there (or everywhere) may be desirable and pleasing to the eye but is in most cases purely a luxury purchase  with limited, if any, negative tax consequences.