If Democrats truly want to increase tax enforcement only on a tiny sliver of the highest-earning citizens, they did not need $80 billion and 87,000 new IRS employees to do it. At best, if they keep their word, there will be a whole lot of fresh IRS employees with not a lot of work to do.
Major changes in federal policy toward student debt have been in the news recently, chiefly with the Biden administration considering some amount of student-loan forgiveness. Meanwhile, very quietly, a more innovative, free-market solution to the student-debt crisis is being attacked. The Biden Consumer Financial Protection Bureau (CFPB) has been cracking down on income-share agreements (ISAs), an innovative solution popularized by Milton Friedman in a 1955 essay titled “The Role of Government in Education” that ultimately made its way into Friedman’s 1962 classic, Capitalism and Freedom. With income-share agreements, students have to pay back a fraction of their future earnings over a fixed amount of time, as opposed to the case with traditional student debt where students often have to pay back a fixed amount of debt payments.
Fortunately, in early August, bipartisan legislation, known as the ISA Student Protection Act, was reintroduced in the Senate by Mark Warner and Chris Coons, two Democrats, along with Todd Young and Marco Rubio, two Republicans. The legislation seeks to combat the Biden administration’s overreach in this area by providing a regulatory framework for such ISAs to exist without regulatory uncertainty and to take steps to eliminate predatory practices by lenders. By providing guardrails such as limits on how high ISA rates can be, the legislation in return exempts ISAs from usury laws and other state regulation, as well as from federal-agency regulation by the CFPB.
And David Bahnsen talks to Steven Teles of the Niskanen Center about political economy. You can listen here or wherever you get your podcasts.