The federal government’s forgiveness of some student loans has proven to be controversial.

The most common objections seem to be: 1) I never went to college so I should not subsidize student loan repayments for those that did, or 2) I went to college and paid off my loans in full, so should everyone else.

The amount of student loan forgiveness so far to millions of working class and middle class Americans pales in comparison to the large amount of money given to the top 1% of the wealthiest Americans by the 2017 Federal tax cuts under President Trump and a Republican House and Senate.

As of April 2024, $153 billion of student debt had been forgiven for around 4,300,000 borrowers, or an average of $35,000 per borrower, equaling about 9.5% of all Federal student loan debt. (In July 2023 a divided U.S. Supreme Court struck down an attempt by the Federal Government to cancel $430 billion for 40,000,000 student loan borrowers). Many of these student loan borrowers had paid on their relatively high interest rate loans for many years before any chance of partial forgiveness.

By contrast the 2017 tax cuts, as of next year, will average more than $60,000 every year for the top 1% of earners in America.

While student loan forgiveness is a “one shot” the average $60,000 tax cut for America’s top 1% happens every year.

One of the biggest tax cuts in 2017 was to the Federal Estate Tax. Since at least WWI, at the death of wealthier Americans our Country has had a tax on their estates, the money or property they still owned at death.

When Ronald Reagan left office in 1989, the Federal Estate tax exemption for a married couple was $1,200,000. That meant that the first $1,200,000 upon death was not taxed at all.

In 2017 the President and Congress doubled the then Federal Estate tax exemption for married couples of $11,000,000 to $22,000,000, and indexed it for inflation. As a result of the indexing for inflation, the 2024 Federal Estate Tax exemption has ballooned to over $27,000,000.

Had Ronald Reagan’s $1,200,000 exemption still in place in 1997 been indexed for inflation the Federal Estate Tax exemption for a married couple in 2024 would have been $2,400,000, not $27,000,000.

Clearly the huge increase in the Estate Tax exemption did not benefit any middle class or upper middle class Americans. In fact, the $27,000,000 Estate Tax Exemption is so huge that only 2 estates out of every 1,000 (.02%) owe any Federal Estate Tax.

Today, for example, just one family that inherits $27,000,000 from their parents saves about six million dollars ($6,000,000) in Federal Estate Taxes, compared to what the Federal Estate Tax would have been with the previous $11,000,000 exemption.

That $6,000,000 benefit to just one wealthy family would have paid for nearly 100 military service members, for example.

The congressional Budget Office in 2018 estimated that the 2017 tax cuts would cost the Federal Government $1.9 trillion ($1,900,000,000,000) over 10 years. Contrary to the statements of some elected politicians in 2017, these massive tax cuts did not “pay for themselves,”

Another 2017 tax cut was the dramatic reduction of the corporate tax rate from 35% to 21%. (President Reagan’s bi-partisan tax reform of 1986, by contrast, set the rate at 28%). Very few middle class American pay a corporate income tax.

While the top 1% of Americans have benefitted greatly from the 2017 tax cuts, including the indexing for inflation of the Federal Estate Tax exemption, the rest of Americans did not do so well.

The President and Congress in 2017, for example, did not index the Federal minimum wage of $7.25 per hour for inflation. In fact the Federal minimum wage of $7.25 has not been raised since 2009. As a result of Federal inaction since 2009, a number of States still use $7.25 as their minimum wage. Had the Federal minimum wage been indexed for inflation it would be at least $13 today.

Why would the 2017 tax cuts have protected the very wealthiest Americans by indexing the Federal Estate tax for inflation but not protect the lowest paid workers in America by indexing the Federal minimum wage to inflation?

The President and Congress in 2017 for the very first time in the 100 year history of the Federal Income Tax did not allow New Yorkers, for example, to deduct all of their State Income Taxes and local and school property taxes on their Federal Income Tax returns. (Traditional fiscal conservatives in particular had always objected to Americans having to pay a Federal Income Tax on taxes they already had paid to State or local governments). The amount we New Yorkers could deduct was arbitrarily capped at $10,000. (Texas and Florida residents, for example, were largely unaffected by the unprecedented cap because they never had any State income taxes to deduct in the first place).

Unlike the Federal Estate Tax exemption, the $10,000 cap on deducting our State Income taxes and local property taxes was not even indexed for inflation.

Hopefully, we might consider the fairness to average, middle class Americans, of the 2017 Tax cuts still in place today while we consider the fairness of some student loan debt forgiveness..

Fred Larson is a graduate of the Princeton University Woodrow Wilson School of Public and International Affairs and Yale Law School. He has been a practicing attorney for 38 years and is a retired Jamestown City Court judge as well as a current Chautauqua County legislator.