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The House's Tax Bill Levies a Tax On Graduate Student Tuition Waivers (nytimes.com)
Camel Pilot writes: The new GOP tax plan -- which just passed the House -- will tax tuition waivers as income. Graduate students working as research assistants on meager stipends would have to declare tuition waivers as income on the order of $80,000 income. This will force many graduate students of modest means to quit their career paths and walk away from their research. These are the next generation of scientists, engineers, inventors, educators, medical miracle workers and market makers. As Prof Claus Wilke points out: "This would be a disaster for U.S. STEM Ph.D. education." Slashdot reader Camel Pilot references a report via The New York Times, where Erin Rousseau explains how the House of Representatives' recently passed tax bill affects graduate research in the United States. Rousseau is a graduate student at M.I.T. who studies the neurological basis of mental health disorders. "My peers and I work between 40 and 80 hours a week as classroom teachers and laboratory researchers, and in return, our universities provide us with a tuition waiver for school. For M.I.T. students, this waiver keeps us from having to pay a tuition bill of about $50,000 every year -- a staggering amount, but one that is similar to the fees at many other colleges and universities," he writes. "No money from the tuition waivers actually ends up in our pockets, so under Section 117(d)(5), it isn't counted as taxable income." Rousseau continues by saying his tuition waivers will be taxed under the House's tax bill. "This means that M.I.T. graduate students would be responsible for paying taxes on an $80,000 annual salary, when we actually earn $33,000 a year. That's an increase of our tax burden by at least $10,000 annually."
Just FYI, any time you are given something of value, it is income. Someone lets you live in their house for free? Income. Someone writes off a debt instead of collecting it? Income. Someone waives a fee they normally charge? Income. A friend gives you an interest-free loan, or even just at below-market interest rates? The IRS has tables to calculate how much income you are required to report. I'm kinda astonished that these tuition waivers weren't always taxed, since everything else is.
There is an exemption for gifts, up to $13,000 per person per person per year. (not a typo) They must be bona fide gifts with no strings or conditions.
See that "Preview" button?
Without these waivers, you would have to work like the rest of us. Instead, you get free education.
Fuck you, whiny children. Get a job.
Get some knowledge dumb-ass; they do work. From The House Just Voted to Bankrupt Graduate Students:
I’m a graduate student at M.I.T., where I study the neurological basis of mental health disorders. My peers and I work between 40 and 80 hours a week as classroom teachers and laboratory researchers, and in return, our universities provide us with a tuition waiver for school. For M.I.T. students, this waiver keeps us from having to pay a tuition bill of about $50,000 every year ...
It must have been something you assimilated. . . .
Let's see. Increase tax burden massively for grad students. So what else do we have? Well, we've got a tax break for private jet owners added in http://thehill.com/blogs/blog-briefing-room/360785-senate-tax-bill-includes-tax-break-for-private-jets (Note that The Hill is a general news site related to Washington politics, generally pretty non-partisan). We've got a removal of the tax deduction for state and local taxes https://www.reuters.com/article/us-usa-tax-local/u-s-towns-cities-fear-taxpayer-revolt-if-republicans-kill-deduction-idUSKBN1DH01D, which is both of quesitonable constitutionality due to the double taxation, screwing over specifically the people in "blue" states which generally have higher state taxes, and harming disproportionately people in middle income brackets. So, yes, please tell Snotnose above or me what sources we should be looking at to see what is wrong about their description. What information that we are not seeing in our echo chamber should change our viewpoint?
"They've been giving their high income people a discount on their federal taxes by passing those costs along to some guy installing mufflers who lives in a state that doesn't hit their residents so hard."
Blue states subsidize red states. I know that fact is upsetting to "hard-working" red staters who get welfare from people in blue states, but they'll just have to deal with the fact they're moochers.
Why is removing a tax deduction classified as LEVYING a tax when it is on something leftists want, but cutting taxes on corporations is classified as taking money from the poor?
Yet another unbalanced anti-left strawman argument from an AC. Normally I'd ignore it, but somebody modded it up.
Under current US tax law, the tuition waiver is not considered income. Now the Rs in the house want to consider it as such. The end result is that graduate students would have an enormous increase in their tax burden, so much so that many may need to abandon their studies. That sure sounds like "levying a tax" to me.
Normally I'd think that neither leftists nor rightists want to discourage people from pursuing graduate degrees. Now I'm not so sure. If only the rich can afford to go to school, then only the rich will profit from the rewards of education. Is this what Rs want?
As for taxes on corporations, let's just deal with a few points here. First of all, an oft-repeated mantra is that the US has one of the highest corporate tax rates in the world. But that ignores the numerous deductions and exemptions that businesses use to reduce their effective tax rate to something that is about average when compared with the rest of the world. Nevertheless, companies find and use tax havens (like in Ireland) where they can stash their cash and avoid paying US taxes. With a reduction in corporate tax rates, I would not be surprised if these foreign tax havens further reduce their tax rates to keep US companies from repatriating their money. That won't be good for either them or the US. And even if that money is repatriated, what guarantee do we have that it will result in more jobs? Companies will still keep their manufacturing outside the US if it's profitable to do so.
All taxation is theft. It is the violent, forceful confiscation of the property of another. The only ethical tax rate is 0.
Good luck with that. Sovereign nations have been taxing their citizens for pretty much all of recorded history.
If it weren't for deadlines, nothing would be late.
Biomedical researchers, research physicians, physicists, space scientists, engineers, environmental scientists, geneticists, and astronomers. Not everything comes out of Corporate America (tm), especially not basic science.
Technically speaking the title regarding ongoing taxation is a license to use the car on public roads. Doesn't apply to a private vehicle never used on public thoroughfares.
Here tuition is tax deductible, scholarships and grants are tax exempt and most if not all of your TA pay counts as a scholarship.
Ah yes, the tried and true "Durr, dah bloo states pay mer' meme.
Blue states have much higher rates of income inequality. -- https://www.cbsnews.com/media/9-u-s-states-with-the-highest-income-inequality/10/
Blue states have much lower home ownership rates. -- http://www.businessinsider.com/homeownership-rate-state-map-2017-7
Blue states have much higher tax rates. -- https://turbotax.intuit.com/tax-tips/fun-facts/states-with-the-highest-and-lowest-taxes/L6HPAVqSF
Maybe you should stop and ask WHY it costs so much to live in blue states, and why for blue states, the metrics that matter are so awful.
Grad student here. I get payed for 20 hours of work per week as a research assistant. The other 40-60 hours per week that I work are considered part of my education, and I have to pay for them instead--the tuition portion gets waived, but I'm still stuck with fees etc.
I don't deny that this is messed up, but counting tuition waivers towards taxable income as written in the house bill is a problem. At public universities, graduate student stipends are usually payed for by government grants that the student's department has obtained--I'm payed from an NSF grant, for example. So raising grad student taxes means you're effectively redirecting education and research grants back to other government programs.
I do think it makes sense, philosophically speaking, to count tuition waivers as taxable income, but if you're going to do that then you should also make it qualify for a tax deduction--which it did, until this year.
Are you fucking high? You must never have been a grad student.
Nowadays, grad students mainly get their tuition waivers by being either teacher's assistants or research assistants and in both cases they're basically working their asses off for minimum wage. I know this because I just came from a meeting of TA's and they're teaching the classes, grading the papers and homework and entering all the grades. They are busting their butts for the measly tuition waivers.
Remember, what's happening here is that the GOP will be taxing people making less than 30k per year so they can afford to give their corporate donors a fat tax break.
And you're going to pay far more taxes under this new bill. Medical expenses will no longer be deductible (and more people will have medical expenses because 13 million people will lose health care the first year). Your local and state taxes will no longer be deductible (and if you live in parts of the country where people wear shoes and have access to dental care, that will mean a huge bite out of your bottom line). You don't have a clue about how fucked you are under the new bill. You've played yourself.
You are welcome on my lawn.
I know reading is hard... but couldn't you even make it to the 6th paragraph of the article you linked to?
What is your opinion of the estate tax?
Help Brendan pay off his student loans
So, per your own argument, tuition has not skyrocketed because of student loans, it has skyrocketed because government massively cut direct funding to universities. You seem oblivious to the fact that essentially all people who advocate that there be government-backed student loans would also prefer direct university funding instead, but the neo-cons cut that off and the response was to move to a student loan-based system. If we returned to direct government support of schools, the student debt problem would vanish.
Your proposed course of action is ridiculous. If you remove loans from the mix, tuition will skyrocket even more and access to higher education in the US for anyone except the hyper-rich will disappear overnight. Even by your own arguments you are advocating for the wrong thing. You should be advocating for a return to a direct funding model for universities -- that will not destroy the education system and will obviate the need for large student loans, exactly per your arguments.
How can anyone argue that inheritance isn't income?
How can it be income, if it's not earned? At most it's a gift from my deceased relative to me. And I think gift taxes are crazy, I've paid taxes once when I earned the money, twice when I bought something for it and now you want to tax it a third time when I'm giving it away? I'm generally opposed to all taxes that are applied just when something changes hands, like here in Norway you pay a 2.5% tax to buy a house/apartment, it's usually equal to 6+ months of rent and makes buying one for a short time a dead loss. Re-registering a car is also very expensive based on age and value with no relation to the fact that it's a few pushes of a button. Income tax is okay. Sales tax is okay. Wealth tax is crap. Gift tax is crap. Death tax is crap. Ownership transfer tax is crap.
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