The United States Senate passed the new GOP tax plan just before 2 a.m. Saturday, Dec. 2. The decision was tight, ending in a 51-49 vote. The only Republican senator to vote against the bill was Bob Corker of Tennessee.
According to a report from the Washington Post, experts from the nonpartisan Joint Committee on Taxation group predict that the plan will add $1 trillion to the national debt. In addition to this, many view the plan as one that will be detrimental for working graduate students due to the initiation of taxes on waived tuition fees for graduate students, in addition to the existing taxes on their salary as teaching or research assistants.
Graduate students who are teaching while pursuing a higher degree are protected under the Tax Cuts and Jobs Act, Section 117(d)(5). This provision waives the high tuitions for these students who at some points may be working 40 to 80 hours a week. In addition to getting their tuition waived under this provision, students are also paid a small salary.
The new tax plan will repeal this provision.
The House tax plan intends to tax the graduate students’ tuition that is waived. The Senate plan does not. However, GOP leaders will begin to reconcile the two versions, possibly repealing the provision that will allow the taxes of graduate students to skyrocket.
Santiago Vidales, co-chair of the Graduate Employee Organization at the University of Massachusetts, explained the concerns he and his fellow graduates have about the bill. Vidales’ taxable income would increase immensely under the new tax bill.
“What’s really scary about this House bill is that it would also tax that extra 30 or 40 thousand dollars which is the tuition waiver,” said Vidales. “I don’t actually ever see this money coming into my wallet, in a sense.”
“This plan would charge me taxes as if I was bringing in, instead of the 20 thousand dollars that I make, potentially 60, 70 thousand dollars,” Vidales explained. “This would raise my tax bill almost 200 percent. So much so that potentially 50 percent of what I get paid would have to go to cover that tax.”
Vidales said living expenses would become increasingly difficult to pay, allowing only for wealthier students to pursue higher education and Ph.D. programs.
“I would have to drop out of school because my wages don’t go far enough to cover that tax bill,” Vidales explained.
The House bill also eliminates the Student Loan Interest Deduction. Evan Kuras, a third year student pursuing his Masters of Science in environmental conservation, spoke on the large effects of this aspect of the bill.
“Repealing the student interest loan deduction hurts those of us with debt from undergrad or debt to be here now,” said Kuras. “Repealing the State and Local Tax deduction would increase our tax burden as would eliminating the Individual Mandate, which might raise our health care premiums, whether we have health insurance through GEO or MassHealth.”
For many, the elimination of the Individual Mandate might force students to choose between paying their medical expenses and finishing their higher education.
Canan Çevik, a Ph.D. student in the department of economics and the president of the Graduate Student Senate, has been fighting to lobby with Congress and the University about the concerns of all graduate students.
“We have been closely working with National Association of Graduate-Professional Students, attending their call-in meetings, mobilizing grad students on campus by extending action plans originated by them to the campus, such as reaching out to legislators with tax bill opposition scripts and signing petitions,” said Çevik.
GSS has raised support and awareness for this tax issue by creating a tax calculator. This method gives a rough estimate of new tax liability of a graduate student under the proposed bill.
Kuras explained the opposition to the bill as a revolution amongst graduate students across the country to support one another. “
Grad students are organizing throughout the country to oppose the bill and especially the tuition tax,” Kuras said. “Groups [and] movements like #GradTaxWalkout and #SaveGradEd have called for walk-outs and rallies across the country.”
The fruits of their labor are beginning to show.
Republican Congressman Pete Sessions, along with many other government officials, are beginning to reject the current plan as a punishment for graduate students.
“Instead of penalizing students who want to get ahead and gain an edge in their fields,” he said in a written statement, “We should be providing them more opportunities to be successful.”
“I believe the legislators supporting the bill are unable to perceive long-term, wider implications of the tax bill provision pertaining to higher education beyond short-term, solely pecuniary benefits,” says Çevik.
UMass spokesperson Ed Blaguszewski released a statement that on behalf of the entire UMass system on the issue.
“On behalf of the five-campus, 75,000-student University of Massachusetts system, we oppose the tax reform package before Congress, which specifically and unfairly targets college students and particularly graduate students,” the statement read.
On Wednesday, Dec. 13, GSS and GEO will work together and hold a teach-in to help graduate students understand more about the bill and how it will affect them.
Gretchen Keller can be reached at [email protected].
NITZAKHON • Dec 13, 2017 at 8:47 am
As though liberals ever cared about the national debt before…