The United States would see a lot more tax revenue if students graduated high school
As thousands of Americans file their taxes today, it’s important to think about how many tax dollars won’t come into the system because of the low-paying jobs so many high school dropouts find themselves working.
If U.S. schools were to graduate 90 percent of their students, that would generate an additional $1.8 billion in yearly tax revenues, according to an analysis conducted by the Alliance for Excellent Education.
Of that total, $1.1 billion would be federal tax revenue while the remaining $700 million would be state and local revenue.
“In these tight fiscal times, governments at all levels are leaving money on the table by not graduating students from high school,” said Bob Wise, president of the Alliance for Excellent Education and former governor of West Virginia. “When students earn high school diplomas, they become more marketable in today’s highly competitive job market, while the higher earnings they pocket translate into increased tax revenues—all without any increase in the tax rate. It’s a win-win.”
High school dropouts have an unemployment rate of 12.6 percent, according to March 2012 data from the U.S. Bureau of Labor Statistics. That’s in comparison to the 8 percent unemployment rate for high school graduates and 4.2 percent for college graduates. When high school dropouts do find a job, they earn about $8,000 less per year than their peers with diplomas.
“Tax policy usually finds two groups, those in favor of tax hikes and those in favor of tax cuts, debating about which direction taxes should take,” Wise said. “Unfortunately, there is not enough discussion about this third direction—graduating more students from high school. The U.S. Congress is constantly concerned about long-term deficit reduction, but as this analysis shows, decisions on how to close budget gaps and build a strong economy must begin with ensuring better educational outcomes for the nation’s students.”