Grad Students Oppose GOP Tax Plan
Rally unites UWM and Marquette students, who say plan makes grad school unaffordable.
“No to excess tax on grad students our economy’s future.” Photo by Brad Poling.
On a snowy Saturday morning, Pere Marquette Park held the largest meeting of Marquette and UW-Milwaukee students in recent memory.
Organizers at the rival universities rallied over 100 participants to deliver a petition to Senator Ron Johnson’s office decrying the GOP’s tax bill, which may repeal a vital provision for graduate students.
Without the provision, Section 117(d)(5) of the current tax law, graduate students would be required to pay taxes on tuition waivers, the funds that cover their tuition in exchange for work done at the university. The House bill, passed on Nov 16, would reclassify these waivers as income, a move that could increase taxes for Wisconsin students by thousands of dollars.
Grad students protest tax bill. Photo by Brad Poling.
With graduate stipends typically falling between $12,000 and $17,000 for UWM grads, or $17,000 to $23,000 for Marquette grads, the increased tax burden is so severe that many students have questioned whether they would be left without the financial ability to complete their degrees.
The proposal threatens the future of grad students, said Reed Heintzkill, a UWM graduate student. “I’m fairly certain there’s a general feeling among grad students, and probably college students in general, that politicians at the state and national level not only don’t have our interests in mind, but in many cases, are rooting against us.”
Not all politicians, though: the rally featured speeches from state lawmakers Jonathan Brostoff and Lena Taylor, both Democrats from Milwaukee, who echoed the students’ outrage. “How can you call those scholarships – those waivers – income?” Taylor said. “If we can spend $3 billion on FoxConn, how can we not make sure people have a higher education, so they can get those jobs?”
Marquette professor Tim McMahon, in a speech expressing solidarity with graduate students, shared a similar vision of the bill’s stakes.
“If this [bill] gets through, you’re going to see your taxes go up by something on the order of $3,000. That is not tax relief,” McMahon said to ralliers. “If you aren’t getting advanced degrees, and future generations aren’t getting advanced degrees, not only is higher education at risk, but industry is at risk. Really, the entire economy is at risk.”
The sustained outcry against the graduate tax appears to be making an impact.
Thirty representatives, all Republicans, have joined Texas Congressman Pete Sessions in opposing the tuition tax, citing the damage such a tax could do to the economy.
In a letter to House and Senate leaders, the 31 representatives argued that “a tax on graduate tuition would be unfair, would undermine our competitive position, and would inhibit the economic growth that tax reform promises.”
For Milwaukee students, the goal now is to keep the pressure on Sen. Johnson, who was an early holdout on the GOP tax bill.
Bill Langhoff, a UWM graduate student, reminded his peers of the stakes: “Until we organize together to stand against this assault, they will continue to take from us again and again,” he said in a speech to fellow protesters.
“When you go home today, don’t be done. This is just getting started.”
The Reagan administration attacked graduate students during his “tax reform” efforts. At that time grad students had no voice and no support against those provisions. Those of us in grad school at the time saw a huge jump in our taxes, which made our education extremely expensive. It is so heartening to see grad students around the country and particularly in Milwaukee join together to speak out against this injustice. Even more gratifying is to see faculty and politicians standing with them. It is long past time that this country entitles the wealthy at the expense of everyone else. Go Grads Go!
Some students have to pay for grad school out of pocket. That means they had to get a job, earn $20-$30k per year doing that job (pay taxes on the money they earned) and then pay for grad school with what was left after taxes.
Why, because a job is working for the grad school, should the value of the free tuition received not be taxed? The school is effectively paying you in the form of free tuition – that is income and should be taxed just as if you worked at a private company and paid your way through school. Why should universities (especially private universities) and the grad students who work for them not have to pay taxes on compensation that non scholarship students are taxed on?
Most graduate students can’t even begin to think about affording to pay for grad school out of pocket, and those that do are often in the situation of working full time and having help from their employers (again). This is because it benefits the employer to have a more well-educated workforce. Just as it benefits the US to have an educated workforce:
Kim Rueben, of the Tax Policy Center at the Urban Institute, said the plan wouldn’t harm just grad students. If young people opt out of graduate education, the damage would be felt throughout the economy.
“Dollar for dollar, this might be the most misguided part of the plan,” she says. “What you’re doing is increasing the cost of going to graduate school … and ignoring the fact that the government makes much more money if people have more education.”
Paying for graduate school would not be so difficult if more work was done to reduce the skyrocketing costs of higher education overall. At public, four-year schools, undergraduate tuition and fees cost about $9,139 this year. In the 1971 school year, they added up to less than $500 in current dollars, according to the College Board. A similar trend follows for private schools–in 1971, for example, Harvard’s $2,600 tuition amounted to about 13 weeks’ worth of the median household’s annual income of $10,285. Today, the median household needs to work for almost a year to pay the full sticker price (John W. Schoen, 2015). (Keep in mind these are costs that don’t go towards faculty or departments, but result from increased available loans for students and pay for high level administrators). In addition, the workload of a graduate student and level of actual pay as a result of tuition remission mean that a graduate student working full time on top of going to school, doing research, writing publications, and just in general trying to stay afloat, makes as little as 17,000 a year. Imagine working 40-60 hours a week to only make that much and then on top of that getting taxed double your actual income. Tuition remission is an investment in the future, not income. You can buy food, pay rent, pay your taxes with income. You can’t do that with tuition remission.
Links to sources:
https://www.npr.org/2017/11/14/563879136/house-gop-tax-plan-would-hit-grad-students-with-massive-tax-hike
https://www.insidehighered.com/news/2016/02/09/study-increased-student-aid-not-faculty-salaries-drives-tuition
https://www.nytimes.com/2015/04/05/opinion/sunday/the-real-reason-college-tuition-costs-so-much.html
https://www.cnbc.com/2015/06/16/why-college-costs-are-so-high-and-rising.html
Here’s a bit more about why tuition support is a worthy cause:
“The very purpose of stipends and tuition support is to provide opportunities for working- and middle-class students to pursue advanced degrees. One hundred years ago, before the advent of the modern stipend/support system, academic careers were closed to all but the independently wealthy. Taxing tuition support would essentially force graduate students without independent means — or parents or partners to support them — to leave their programs. And many who now dream of pursuing graduate study would simply not apply.
Nobody goes to graduate school because it pays well. Even graduate students in STEM fields face a discouraging, often grueling job market post-PhD. We go to graduate school to study physics, biology, chemistry, philosophy, history, mathematics, economics, languages and dozens of other subjects because we believe they are foundational to building a better nation and a better world.”
https://www.washingtonpost.com/news/grade-point/wp/2017/11/12/im-a-grad-student-and-the-republican-tax-plan-could-cost-me-thousands-of-dollars/?utm_term=.7fc7f975806d
JS28
That is an argument for lower tuition, or tax credits for everyone who pays tuition. The tax change the article is talking is about closing a loophole in our tax code that unfairly benefits colleges and universities by allowing them to effectively pay grad students less by compensating them in the form of tuition rather than cash income. In doing so the rest of society has to pay more in taxes to make up the difference.
You are not getting taxed double your actual income. The value of your “free” tuition IS part of your income. Just because you are getting compensated in a different form than cash does not mean it is not income. Why should the person who works nights or weekends at a private company to pay for school have to pay taxes and the person who works in a lab for a professor not have to pay taxes?
It is funny that people think the tax system is unfair, but then argue that the particular tax break that they happen to receive is needed to help society.