Bernie Sanders’ tuition-free college plan can work

Democratic presidential candidate Bernie Sanders has proposed a plan in his campaign that public education at a university level could be tuition-free. While some may believe this is just a pipe dream, think again.

According to a study done by economists at the University of Massachusetts Amherst, providing a free college education may be possible. A paper by the Political Economy Research Institute (PERI) claims that about $300 billion would be collected from the enactment of the Inclusive Prosperity Act, a bill by Minnesotan Keith Ellison and introduced in the Senate in 2015 by Vermont Senator Bernie Sanders.

If passed, this bill would call for a 0.5 percent tax on stock trades, a 0.1 percent tax on bond trades and a 0.005 percent tax relative to the notional value of any derivative assets being traded. This basically means that a taxation on Wall Street would pay for the next generations’ university.

The paper, “The Revenue Potential of a Financial Transaction Tax for U.S. Financial Markets,” explains that a financial transaction tax (FTT) of this kind with our current volume of trading would generate about $680 billion per year. Even so, researchers understand that this is a steep estimate. If trading volume on Wall Street does decrease along with other factors, the tax would still bring in a revenue of about $300 million.

This would cover the cost of an estimated $65 to $70 billion needed to to provide free public university to its students.

Economics Professor Robert Polin claims that a sales tax on Wall Street is not a new idea – other first-world countries such as the United Kingdom, France, Italy and China have operated on this philosophy for quite some time.