This is exactly the reason progressive income taxes are unfair: the incentive to create additional economic activity is reduced because of higher marginal rates. I never understood the stupidity of people paying different percentages in a taxes; it's punishing hard work. Your exampke makes it clear that it would be better to not work as hard because it actually would be irrational to do so.
The other part of this is the inherent infairness of someone paying $65000 per year for Stanford. That's just insane. The price of something should not change based on someone's income. Why should someone making $225k per forced to subsidize everyone else? If the lower income kids want a BMW, should higher income families be required to pay for it? Going to Stanford isn't a right; it's a luxury.
Tuition, like tax rates should be the same for everyone. As it is now, the market responsiveness of higher education costs is distorted because of this cross subsidization scheme. If we eliminated all financial aid, Stanford would cost $8000 per. As it is now, universities have zero incentives to cut costs because many of them face no exposure to actual market forces. Whatever extra they want, they know students will just go deeper into debt.
It's a scam. How many Vice Provosts and Assistant Deans or "coordinators for diversity" does a university actually need? They could likely cut half of university administrators and it would make no appreciable difference to the quality of education.
The relationship between hard work and income is very slight. The price of labour comes from supply and demand. There's little shortage of people willing to work hard. Skill, knowledge, networks: that's what people pay for, not hard work.
Now turn your perspective around. How fair is the distribution of educational opportunity and, especially, networking opportunity with powerful people?
Progressive taxes don't do my income any good. But I wouldn't be in the position I am today without them; I grew up poor, too poor to own a family computer, never mind a family car. I still resent the lack of information I had about educational opportunities. And more than anything, I wonder what we could achieve if the impoverished of the world didn't need to scratch out subsistence living, and could instead apply themselves to the limits of their ability.
The other part of this is the inherent infairness of someone paying $65000 per year for Stanford. That's just insane. The price of something should not change based on someone's income. Why should someone making $225k per forced to subsidize everyone else? If the lower income kids want a BMW, should higher income families be required to pay for it? Going to Stanford isn't a right; it's a luxury.
Tuition, like tax rates should be the same for everyone. As it is now, the market responsiveness of higher education costs is distorted because of this cross subsidization scheme. If we eliminated all financial aid, Stanford would cost $8000 per. As it is now, universities have zero incentives to cut costs because many of them face no exposure to actual market forces. Whatever extra they want, they know students will just go deeper into debt.
It's a scam. How many Vice Provosts and Assistant Deans or "coordinators for diversity" does a university actually need? They could likely cut half of university administrators and it would make no appreciable difference to the quality of education.