A new report says Trump’s “Education Policy” is likely to impact not just schools, but “the entire education business” in the United States.
The report by the Center for Economic and Policy Research, which is led by the liberal economist Emmanuel Saez, estimates that Trump’s tax cuts would lead to a $5.3 trillion increase in federal spending over the next decade, with nearly $2 trillion going to school systems.
The Trump administration and the House and Senate have both said that the plan is needed to address the nation’s rising debt, and many educators are concerned that it will mean lower teacher salaries and cuts to student tutoring programs.
Saez says the report proves that “it is unlikely that the tax cuts will pay for their entire purpose.”
“It is unlikely to pay for the $5 trillion of spending on higher education in the next 10 years.
The tax cuts are not going to pay that.
They are only going to get a little bit of that money back from teachers,” Saez said.
“But this is the biggest opportunity we have had in a long time for the federal government to make big changes to the way it does education.
They need to be able to provide real financial support to teachers.”
The report estimates that the policy would lead the government to spend more than $1.3 billion per year on teacher salaries.
The cost would be borne by state and local governments.
According to the report, the tax cut will help boost the share of the federal budget that is spent on education, and the share will rise from 21 percent in 2019 to 25 percent in 2025.
The Tax Policy Center estimates that education spending will rise about 8 percent by 2025, rising from $2.8 trillion in 2019 (with a tax cut) to $3.2 trillion by 2025.
If Trump’s proposal were enacted, the report estimates the government would spend $5,200 for every student enrolled in public schools in 2025, a reduction from the current level of $3,900.
Saez argues that the increase in spending could be offset by a $1,400 tax cut for individuals.
On the other hand, he argues that Trump would still lose money from the tax bill because the government is expected to raise taxes on the wealthy and corporations.
“[T]he tax cuts for the wealthy would still be $1 trillion lower than the revenue impact of the tax reform, so they would still reduce overall revenue by $2,400 per student, not the $1 billion per student estimated in the report,” he wrote in a statement.
“The real savings are for states that have lower state tax rates, like those in the Midwest and South.
States with higher taxes would see significant increases in revenue from the plan.”
If the tax policy were enacted today, the Center estimates it would be $547 billion, or 3.4 percent of total federal spending in 2025 and 2024.