Key takeaways:

• Recent Democratic proposals to exempt broad swaths of the middle class from federal income taxes accept a damaging frame of taxes as a pure drain on affordability.
• But taxes aren’t a drain on affordability; they fund the public services and social insurance programs that make a decent life possible for middle-class families.
• Progressive taxes on the ultrarich and corporations are essential and should be the immediate priority, but they cannot sustain the public sector alone, let alone expand it in ways needed.
• Middle-class tax rates have fallen by a third since 1979, yet economic anxiety remains high. Tax-cutting has failed because it has left the private-sector drivers of inequality untouched and starved public services.

For decades, anti-tax politicians have tried to smuggle in large tax cuts for the ultrarich and corporations by loudly offering tax cut crumbs to the middle class. Key to this effort has been framing taxes as a pure drain on typical families’ ability to afford a secure economic life. Any success in this dishonest campaign to foster anti-tax sentiment is a disaster for working people—and that’s why some recent tax policy ideas from Democrats and the rhetoric around them are so deflating.

Two things are true about taxes in the United States. First, taxes on the richest families and corporations are far too low. Second, it is broad-based taxes on the middle-class that are the foundation of a functioning public sector and a decent society.

Progressive taxes on the ultrarich and corporations are mostly needed to reduce the potential gains to the rich and powerful from rigging the rules of markets. When the powerful rig these rules and hugely disproportionate shares of income concentrate at the top—like in the United States today—progressive taxes can also raise significant revenue.

But if sharply progressive taxes succeed in reducing the incentive for rigging the rules of markets and if other policies help lead to more broadly shared income growth in the country, this means that progressive taxes will raise a lot less revenue over time.

To be clear, this would be a victory for a better society. For example, the purpose of a carbon tax is to lower greenhouse gas emissions and if it’s highly successful, it will by definition stop raising much revenue. Progressive taxes aimed at reducing inequality will see the revenue they raise start to decline when they are their most successful. Right now, we do have deep inequality in the U.S. and progressive taxes will raise a lot of money—but we shouldn’t make the public sector’s resources dependent on this remaining true forever.

But more importantly, taxing only the very rich has never been the primary foundation of public-sector resources and can’t be going forward. The revenue needed to support programs that provide social insurance and income support (Social Security and Medicaid, for example), as well as public investment and services like highways, transit, and public education requires broad-based taxation. Without Social Security providing secure retirement, Medicare, Medicaid, and the Affordable Care Act providing access to health care, and public schools providing universal education, a decent life for the middle-class would be entirely unaffordable. And without middle-class taxes supporting all of these things, they would collapse.

If typical Americans lose faith that paying broad-based taxes to support public services and investments is a good deal, it will be a disaster for their ability to afford a decent life. Sadly, some recent Democratic proposals capitulate to this view of taxes as a “pure burden” rather than an investment in the country and its people.

Senators Chris Van Hollen (D-MD) and Cory Booker (D-NJ) have both floated ideas that would draw a line below which nobody would pay any federal income tax (Van Hollen’s line is $92,000 for a married couple while Booker’s is $75,000). Both proposals pay for this with tax increases on the rich. If these tax increases on the rich were standalone pieces of legislation, they’d be excellent. But they are instead paired with tax benefits that mostly miss the bottom of the income distribution. In Booker’s proposal, the gains from the higher standard deduction that zeroes out taxes for many are actually largest for families between the 60th and 80th percentiles, and gains persist on average through the 99th percentile. Van Hollen’s bill phases out the “alternative maximum tax” that zeroes out taxes for many, and the biggest gains hit in the middle of the income distribution, but the proposal still provides gains on average for families between the 60th and 80th percentiles.

Both proposals clearly aim to address the affordability challenge that politicians have seized on, but in doing so both frame taxes as a pure drain on affordability, with Booker even calling his the “Keep Your Pay Act.” But taxes aren’t a drain on affordability. They provide the resources needed to run the public sector, and the public sector in turn does a great deal to make life more secure and more affordable over people’s lifetimes.

Social Security and Medicare, for example, both rely on payroll taxes on workers’ wages. But they also provide income for these workers in retirement. Instead of draining affordability, these programs smooth income over the lifecycle to ensure working families can afford a decent life even when they can no longer work. Food stamps and Medicaid are financed by taxes and provide benefits to people who otherwise would not be able to afford the most basic necessities: food and health care. The same people who receive Medicaid and food stamps in one era of their lives will contribute to them through taxes in other periods when they have found steady work. Again, the taxes collected are recycled back into families’ incomes in ways that minimize suffering and severe affordability crises throughout their lives.

State and local taxes—often borne quite heavily by the broad middle class—pay for public education. This education—both K–12 and higher education—is incredibly valuable and necessary for anyone operating in modern economies. Without the taxes to support education, families would have to dig into their own pockets to pay for private schooling, and it would be delivered less efficiently and much less equitably.

Other taxes finance infrastructure and other key public goods and services, without which life would be harder and more expensive for most families.

Cutting taxes even fails on the crass political grounds of buying voters’ short-term goodwill. It’s often underrecognized (mostly, again, because of conservative campaigns to hide this fact), but taxes for the middle class have been cut a lot in recent decades. Figure A below shows the percentage point change in tax rates of households at different parts of the income distribution between 1979–2019. We stop at 2019 to compare equivalent points of the business cycle. Tax rates tend to fall sharply during recessions, which can obscure the full extent of legislative changes to tax rates. Further, cutting taxes temporarily during recessions can make some sense—tax cuts are one form of fiscal stimulus that can be used to fight recessions (unless these tax cuts are quite well-targeted on low- and moderate-income families, they tend to be less efficient stimulus than spending measures).

Figure A

The largest tax cuts have gone to the bottom fifth of households—a key policy victory of recent decades. The expansion of refundable tax credits like the Earned Income Tax Credit and the Child Tax Credit—credits that are paid directly to lower-income families even if their amount is greater than the families’ tax liability—have essentially made the problem of taxing families into poverty almost nonexistent. These tax cuts should clearly be kept. But all households, not just those with very low incomes, have seen sizable tax cuts. Tax rates for households in the middle of the income distribution have been cut by a third since 1979.

And yet, does anybody feel like this tax-cutting has led to most U.S. households feeling great about their place in the economy and their prospects for affording a decent life today? Do these voters express warm feelings about the policymakers from both parties who provided these middle-class tax cuts?

The tax-cutting strategy has failed to make these households happy for two reasons. First, it leaves the private-sector drivers of inequality untouched, and as governments have collected less in taxes, employers and corporations have contributed less to middle-class families’ wages. Second, lower taxes have starved public-sector capacity and led to a degradation of public services. Strangely, the newly fashionable “abundance” movement often frames this degradation as a problem of public-sector excesses, but it’s clearly driven by disinvestment. In short, middle-class families value public services and the decades-long campaign to cut taxes has harmed the ability to provide them. The lessons for today’s tax debates should be clear.

The failure of tax-cutting to foster economic security and happiness is not all that surprising for scholars of U.S. attitudes toward taxes, who argue that Americans are not universally anti-tax. Instead, Americans view paying taxes as a patriotic good and a moral obligation. But they are angry about paying their taxes when they think others are shirking their part of the social contract, particularly when they think the richest people and corporations aren’t paying their fair share.

Because we are starting with such high levels of inequality and because of this public cynicism about the rich ever being forced to pay their fair share, the first priority—by far—for policymakers today should be to enact significant stand-alone tax increases on the ultrarich and corporations. The revenue raised solely from the ultrarich could close today’s fiscal gap, the difference between today’s budget deficits and what is needed to put them on a sustainable path going forward. And this act would convince the rest of Americans that the ultrarich are not always prioritized in policymaking and would make future debates about the costs and benefits of higher taxes for higher levels of public goods much healthier.

But we can’t run a decent society based on just taxing the rich and telling everybody else that taxes are an unfair drain. Oliver Wendell Holmes famously said that taxes are the price you pay for civilization. But if the taxes are paid only by the rich, we will get the civilization they want. That doesn’t seem good enough to me.

Key takeaways:

• The growing revenue of college sports and the heightened attention on the experience of college athletes suggest that college athletics is far from the amateur endeavor it might have started as decades ago.
• Recent policy changes have allowed some college athletes to receive compensation, whether in the form of name, image, and likeness (NIL) rights or revenue sharing. However, not all college athletes have the right to be compensated.
• The NCAA has backed the SCORE Act, which would jeopardize college athlete compensation by prohibiting them from being classified as employees in the first place.
• Policymakers should consider proposals that strengthen rights for college athletes, including granting them employee status under federal labor laws.

Introduction

It has long been argued that college athletes should not receive compensation to maintain the “amateurism” of college sports. However, the growing revenue generated from college sports and heightened attention on the experience of college athletes suggest that college athletics is far from an amateur endeavor.

Only recently have college athletes been granted the right to be compensated for name, image, and likeness (NIL) rights. This decision came into effect after years of antitrust lawsuits against the National Collegiate Athletic Association’s (NCAA) compensation rules. These lawsuits culminated in the Supreme Court decision in NCAA v. Alston, as well as a growing number of states enacting their own compensation laws for college athletes. The recent House v. NCAA settlement allows Division I schools—those with the largest and most economically lucrative athletic programs—to share revenue with college athletes, and further expands opportunities for college athletes to receive compensation.

As a result of these policy changes and a growing movement among college athletes to demand fair compensation for their performance, federal policymakers have put forward proposals to address college athlete compensation. In this blog post, we examine these proposals and their impacts on college athletes and their labor/employment status.

A brief history of college athlete compensation

Despite claims of “amateurism” in college sports, the experience of college athletes showcases a reality in which athletics is prioritized over academics. For example, while the NCAA puts limits on how many hours college athletes can engage in athletic-related activities during playing season, many coaches create expectations for students to exceed these limits, with some athletes exceeding over 40 hours per week. News coverage has reported that coaches have issued fines to athletes who miss practices. Many college athletes are also required to travel for their games, forcing them to miss classes. If college athletes fail to meet these expectations, they may be cut from the team, which could jeopardize future scholarships and other academic opportunities.

Simply put, some college athletes are expected to perform a physical regimen that more closely resembles professional sports than amateur endeavors on top of their academic coursework. The athletic commitment is demanding enough to be its own job, yet college athletes are performing them without any meaningful compensation in return.

In recent years, there have been several policy changes related to college athlete compensation. In 2019, California became the first state to pass a law that granted college athletes NIL rights. The NCAA permitted NIL compensation in 2021 and since then, more than 30 states have enacted laws related to college athlete compensation, with remaining states deferring to NCAA rules to regulate such compensation.

A primary driver of the NCAA’s change of rules regarding NIL compensation was the 2021 Supreme Court decision in NCAA v. Alston. The unanimous decision upheld a lower court decision that found the NCAA’s rules restricting certain educational benefits for college athletes violated federal antitrust laws. In a concurring opinion, Justice Brett Kavanaugh questioned “whether the NCAA’s remaining compensation rules can pass muster under ordinary rule of reason scrutiny” and suggested collective bargaining as an avenue for college athletes to receive a fairer share of the revenue that they generate for their schools. Soon after the NCAA v. Alston decision, the National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo issued a memorandum taking the position that college athletes are employees under the National Labor Relations Act.

In response to this memo, men’s basketball players at Dartmouth College filed for a union election petition at the NLRB; however, the petition was withdrawn shortly after the 2024 presidential election. In January 2025, Acting General Counsel William Cowen rescinded Abruzzo’s memorandum, leaving college athletes’ employee status in limbo.

The House v. NCAA settlement, which allowed Division I schools to share revenue directly with college athletes, was another turning point in the college athlete compensation landscape. The majority of states with college athlete compensation laws have considered legislation to modify their statues to reflect the terms of the House settlement, but not all have done so.

Who are college athletes?

The National Collegiate Athletic Association is the governing body for college athletics in the United States, overseeing sports programs for 557,000 college athletes at more than 1,100 colleges. It organizes institutions into three divisions based on size, athletic scope, and financial resources. Division I schools are the largest, with the most extensive athletic programs and highest scholarship limits. Approximately 37% of college athletes compete for Division I schools. Division II schools offer fewer scholarships and financial resources, while Division III has the greatest share of college athletes (38%), but offers no athletic scholarships.

During the 2024–2025 school year, the college athlete population was 57% male and 43% female. These young men and women are diverse: 61% are white, 16% are Black, 7% are Hispanic or Latino, 7% report more than two races, and 2% are Asian. Breaking down demographics by race and gender, we find that white males make up the largest group at 32%, followed by white females at 28%, Black males at 12%, and Black females at 4%. The remaining athletes fall into other demographic categories. If we focus on men’s basketball and men’s football athletes at the highest revenue-earning,1 there are 11,504 total athletes, 32% of whom are white and 48% of whom are Black, with the remaining athletes falling into an “other” race category.

Figure A

In terms of geography, college athletes tend to be from the most populous states. According to estimates using NCAA data and population data from Census, most student-athletes are from California, Texas, Florida, New York, and Pennsylvania (in descending order). On a per capita basis, it is Georgia, North Carolina, and Michigan (in descending order) that produce the highest rates of college athletes. This is likely due to having several large state universities with strong athletic programs and an impressive high school sports infrastructure. NCAA-affiliated institutions are also concentrated in the populous states, but especially among states in the Northeast. The states with the most NCAA schools are Pennsylvania (96), New York (93), California (59), Texas (53), and Massachusetts (51).

Current policy landscape

As mentioned above, many states have enacted laws that grant college athletes NIL rights. In the wake of the House v. NCAA settlement, there have been calls for federal policymakers to pass legislation addressing college athlete compensation.

One of the most prominent pieces of federal legislation is the Student Compensation and Opportunity through Rights and Endorsements (SCORE) Act. Backed by the NCAA, this bill would prohibit college athletes from being classified as employees, denying basic labor rights to over half a million young people. The bill creates a federal standard for NIL rights. In doing so, the SCORE Act preempts state legislation concerning college athlete compensation, creating a ceiling rather than a floor for setting standards around college athlete compensation. Further, the SCORE Act limits the types of NIL deals athletes can enter, places caps on NIL payments, and restricts athletes’ abilities to transfer and play at new schools. Finally, the bill would grant the NCAA broad antitrust immunity by authorizing them to limit revenue sharing and education-related benefits to athletes.

On April 3, 2026, President Trump issued an executive order on college athletics. Similar to the SCORE Act, the order directs the NCAA to tighten rules on transfers, eligibility, and NIL compensation, threatening noncompliant schools with the loss of federal funding. It does not, however, address whether college athletes are employees (an earlier executive order from Trump directed the Department of Labor and National Labor Relations Board to clarify employee status of college athletes). Multiple lawyers have argued the latest executive order would not survive a legal challenge. The NCAA president nonetheless praised it, and both the administration and conference commissioners are using the order to push Congress to pass the SCORE Act.

The Student Athlete Fairness & Enforcement (SAFE) Act is another proposal that seeks to codify a federal standard for NIL rights. However, unlike the SCORE Act, the SAFE Act establishes strong health and safety protections for college athletes, allows flexibility for transfers, and places penalties on bad actor agents, among other reforms. Furthermore, the bill does not address college athletes’ employee status or shield the NCAA from antitrust liability.

By far the most effective policy solution for college athletes to be fairly compensated is to grant them the right to form unions and bargain collectively. Legislation like the College Athlete Right to Organize Act  would classify college athletes as employees, granting them the right to form unions and bargaining collectively under the National Labor Relations Act. The bill would also amend the NLRA to define public colleges—in addition to private colleges—as an employer in the context of intercollegiate sports so that all college athletes have the right to organize and collectively bargain.

Below we evaluate whom these proposals impact and estimate how much revenue the college sports industry generates under current compensation policies.

College athlete demographics versus college attendee demographics

College sports are frequently presented as disproportionately Black, but the data show a slightly different story. Black college athletes make up roughly 16% (89,000) of all college athletes compared with 13% (3.31 million) of the total college student population, not significantly different from the NCAA share. Hispanics are drastically underrepresented in the NCAA, accounting for only 7% of college athletes, despite representing over 20% of total college enrollment. In fact, it is white college athletes, and white male athletes in particular, who are disproportionately represented in college athletics: While 61% of college athletes are white and 32% are white males, only 48% of all college students are white and only 19.1% are white males. Notably, it is Black female athletes who are left out of NCAA college athletics at the highest rates. While they account for 8.3% of total college enrollment (2.14 million), they are only 4.5% of total college athletes in the NCAA (25,000).

Figure B How much do collegiate sports make?

By far, the most economically lucrative division in the NCAA is Division I sports, which includes 37% of total athletes but generates 96% of total revenue across the three divisions, according to the NCAA. According to the Knight-Newhouse College Athletics Database (an authoritative source on college athletics finances and a better representation of self-generated revenue), Division I schools generated $14.6 billion during the 2024 fiscal year. For context, of the five major professional sports leagues in the United States, only the NFL generated more revenue than Division I schools did during the same time period. The NFL, MLB, NBA, NHL, and MLS generated $22.2 billion, $12.8 billion, $12.3 billion, $6.6 billion, and $2.2 billion, respectively, in fiscal year 2024. The primary revenue sources for NCAA Division I are media rights (27%), donor contributions (22%), ticket sales (15%), and institutional support (14%). NCAA Division I revenue has grown 115% (in 2024$) since 2015.

Figure C

Due to the House v. NCAA settlement, schools gained the ability to share revenue directly with athletes beginning in the 2025–2026 school year, adding to any third-party NIL earnings athletes may receive. Though official figures for both revenue sharing and NIL deals are unavailable, schools are currently capped at $20.5 million under the revenue-sharing agreement. Not every university joined the new revenue-sharing arrangement, but every Power 4 school did (the 68 universities in the four highest revenue-generating conferences). Under the generous assumption that all Power 4 schools share the full $20.5 million with their athletes, this would amount to approximately $1.394 billion in athlete earnings, or about 15.1% of total revenue across these conferences. For comparison, coaches at the same set of schools receive $2.3 billion in compensation or 19% of total expenditure. However, if implemented as intended, the revenue-sharing agreement would be a step-up for revenue-generating athletes. Prior to House v. NCAA, the most Power 4 schools could provide the athletes was $2 to 4 million dollars in athletic scholarship money.

Conclusion

Despite the growing revenue that athletes are generating for college sports, many college athletes are not being compensated for their work. Recent policy changes have allowed some college athletes to receive compensation, whether in the form of NIL rights or revenue sharing. However, the reality is that not all college athletes have the opportunity to be compensated. Federal policy proposals, such as the SCORE Act, would further jeopardize college athlete compensation by prohibiting them from being classified as employees in the first place. It is bad policy to deny any worker basic labor rights. Policymakers should consider proposals that strengthen rights for college athletes, including granting them employee status under federal labor laws.

Acknowledgments

The authors thank the Notre Dame Student Policy Network (SPN) for their contributions to the background research for this blog post. The authors would like to thank Billy Bonnist and Liesl Erhardt for leading the SPN team, which included Sarah Francis, Evan Fitzpatrick, Ciara Gilligan, Anvita Jaipura, Owen Murphy, and Caroline Streicker.

1. Defined as the Football Bowl Subdivision (FBS) autonomy schools or schools in the Power 4 (formerly Power 5) conferences. It is worth acknowledging that other sports also produce significant revenue, including women’s basketball, softball, men’s baseball, and women’s volleyball.