Mayor Paul Soglin and a public interest research group held a press conference Thursday on the impending “fiscal cliff” and how tax policies affect student loan debt.
New research from the Wisconsin Public Interest Research Group estimates that the federal government loses $150 billion a year in potential revenue due to corporations investing money in offshore bank accounts to avoid U.S. tax rates.
WISPIRG Program Director Joe Rasmussen said the practice is unethical and harmful.
“When corporations exploit offshore tax loopholes to skip out of paying their bill the rest of us are left to pick up the tab,” Rasmussen said. “[It’s] perfectly legal, but it’s not fair, and it’s time to put an end to it.”
Education is one of the public services that suffers, according to Soglin, and WISPIRG’s research reports the amount of revenue lost in one year through tax evasion measures could provide pell grants worth four years of education to 10 million students.
UW-Madison freshman and WISPIRG’s Board of Directors member Mariana Debernardini said it is unfair students are losing educational opportunities because federal funding cuts are making college more expensive.
“Millions of students across the country depend on federal student aid to keep college affordable and accessible,” Debernardini said. “Cuts … will risk programs that keep our higher education system strong.”
Debernardini also said she is concerned about how federal spending cuts and higher taxes resulting from offshore bank accounts are affecting the job market for recent graduates.
“The fact that all of these cuts could occur while offshore tax loopholes allow wealthy individuals and corporations to dodge $150 billion in spending is absolutely appalling,” Debernardini said.
According to Soglin, the economy will not grow unless public dollars are collected and invested in education to allow graduates to enter the consumer market.
“We now have a generation of university graduates overburdened by student loans,” Soglin said. “It is slowing down the recession, it is a burden on them, it’s a burden on the housing market, and it’s holding back the economy.”
