TAILIEUCHUNG - PROMOTING ECONOMIC MOBILITY BY INCREASING POSTSECONDARY EDUCATION

Although the statutory top marginal tax rate was over 90% in the 1950s, the average tax rate for the highest income taxpayers was much lower. The average tax rates at five-year intervals since 1945 for the top and top of taxpayers are shown in Figure 1. The average tax rate for the top (one taxpayer in 10,000) was about 60% in 1945 and fell to by 1990. The average tax rate for the top (one taxpayer in 1,000) was 55% in 1945 and also fell to by 1990, following a similar downward path as. | PROMOTING ECONOMIC MOBILITY BY INCREASING POSTSECONDARY EDUCATION BY RON HASKINS HARRY HOLZER AND ROBERT LERMAN Economic MobilityZ Project An Initiative of The Pew Charitable Trusts ACKNOWLEDGEMENTS Ron Haskins is the Co-Director for the Center on Children and Families at The Brookings Institution and a Senior Consultant at the Annie E. Casey Foundation. Harry Holzer is a Professor of Public Policy at Georgetown University and a Senior Fellow at The Urban Institute. Robert Lerman is an Institute Fellow in labor and social policy at The Urban Institute and a Professor of Economics at American University. The authors thank Mary Baugh and Julie Clover for their research assistance and help preparing the manuscript and Victoria Finkle for verifying the text. Editorial assistance was provided by Ellen Wert and design expertise by Carole Goodman of Do Good Design. The authors also thank the Economic Mobility Project principals and advisory board members for their thoughtful suggestions and feedback. All Economic Mobility Project materials are reviewed by members of the Principals Group and guided with input of the project s Advisory Board see back cover . The views expressed in this report represent those of the authors and not necessarily of all individuals acknowledged above. www. economicmobility. org May 2009 PROMOTING ECONOMIC MOBILITY BY INCREASING POSTSECONDARY EDUCATION BY RON HASKINS HARRY HOLZER AND ROBERT LERMAN CONTENTS 3 Introduction Prologue 4 Executive Summary 7 Would Postsecondary Education Boost Economic Mobility 15 Why Federal Support for Postsecondary Education 16 Overview of Federal State and Private Student Aid 19 Grant Programs Overview 22 Loan Programs Overview 25 Tax Provisions Overview 27 Trends in College Prices Net Prices and Student Aid 29 Effectiveness of Student Aid in Boosting Enrollment and Graduation 29 Grants Effectiveness 31 Loans Effectiveness 32 Tax Provisions Effectiveness 33 A Plan for Promoting College Attendance and Graduation 35

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