Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The GOP Tax Plan Will Destroy Graduate Education

forbes.com

Post reply on HN
Print view View original

51–60 of 99 posts

Re: The GOP Tax Plan Will Destroy Graduate Education

#51

Post by bo1024 »

Despite all the comments, it seems hard to gauge what would happen if something this insane were to actually pass.

Hopefully universities would find a way to "creatively adjust" their accounting such that graduate students are paid the same net amount as they were, but universities are big bureaucratic institutions and slow to change or adapt.

I'll only speak to what I know, which is fully-funded PhD programs in STEM. If this change hit students directly, it would be devastating.

If you look at top private institutions in the USA, you might notice that the socioeconomics of the undergrads skew rich-rich-rich but the STEM PhD students come from all walks of life (and countries all over the world). That's because the programs pay them enough to live on, albeit barely in many cases. If that fact goes away, so will the students.

Now maybe universities will be able to adapt and either pay enough to make up for it, or change their accounting. But most likely there will be a dichotomy where the richest and most successful programs have the easiest time negotiating the change while the others get hit hard.

Re: The GOP Tax Plan Will Destroy Graduate Education

#52

Post by rayiner »

tanderson92 wrote: post #48
rayiner wrote: post #47

Earlier quoted context omitted.

Graduate students, as a class, are not the "least privileged." Most are from families that are pretty educated and well-off to begin with.

That is true, and is unrelated to my comment. I was referring to the least privileged members as a subset of that class. I know plenty of PhD students who were the first in their family to attend college, or graduate high school.

It depends on what you do with the extra revenue after you repeal. Repealing it and using the revenue to lower corporate taxes may or may not be fair (maybe it creates more jobs for lower-income people, who knows). Repealing it to increase the earned-income tax credit would almost certainly be fair. You'd be getting rid of a tax break that disproportionately benefits more privileged people, and expanding a tax break that disproportionately benefits less advantaged people.

Re: The GOP Tax Plan Will Destroy Graduate Education

#53

Post by tanderson92 »

rayiner wrote: post #52
tanderson92 wrote: post #48

Earlier quoted context omitted.

That is true, and is unrelated to my comment. I was referring to the least privileged members as a subset of that class. I know plenty of PhD students who were the first in their family to attend college, or graduate high school.

It depends on what you do with the extra revenue after you repeal. Repealing it and using the revenue to lower corporate taxes may or may not be fair (maybe it creates more jobs for lower-income people, who knows). Repealing it to increase the earned-income tax credit would almost certainly be fair. You'd be getting rid of a tax break that disproportionately benefits more privileged people, and expanding a tax break…

> Repealing it to increase the earned-income tax credit would almost certainly be fair.

False. The IRS states that the EITC only applies to those over age 25 if you do not have a qualifying child (many graduate students fail both). Also, some graduate students fail the most basic tests for EITC-eligibility since they do not have "earned income" despite having taxable income.

Another thing is that the tuition being added to AGI means every single graduate student will be ineligible for the EITC just on AGI grounds.

Anyway the plan uses it to fund corporate tax cuts so your hypotheticals don't really apply -- we have a concrete bill to discuss.

See: https://www.irs.gov/credits-deductions/individuals/earned-in...

https://www.irs.gov/credits-deductions/individuals/earned-in...

Re: The GOP Tax Plan Will Destroy Graduate Education

#54

Post by taylodl »

lostapathy wrote: post #32
taylodl wrote: post #16

Earlier quoted context omitted.

But these students aren't getting loans - they're having their tuition waived. Now the government wants to tax the amount waived as income. If anything, graduate students will now be forced to get loans in order to pay their taxes - which is absurd.

Or maybe tuition will come back down to a level that actually matches what it costs to run the school, and grad student instructors will get paid a wage instead?

Which costs the institutions money in the form of paid wages to grad student instructors - which is an actual outlay of money. Lowering the tuition across the board for grad students lowers it for all grad students, not just the grad student instructors. Either way the institution, the grad student, or both, are out more money out of pocket as a result of this plan.

Re: The GOP Tax Plan Will Destroy Graduate Education

#55

Post by bklyn11201 »

bo1024 wrote: post #51

Despite all the comments, it seems hard to gauge what would happen if something this insane were to actually pass. Hopefully universities would find a way to "creatively adjust" their accounting such that graduate students are paid the same net amount as they were, but universities are big bureaucratic institutions and slow to change or adapt. I'll only speak to what I know, which is fully-funded PhD programs in STEM…

STEM PhD students provide USA universities with inexpensive teaching labor, prestige, future donation revenue, future patent revenue, and the labor to complete research grants. The best research institutions will move quickly to keep the graduate system in place.

Re: The GOP Tax Plan Will Destroy Graduate Education

#56

Post by hcknwscommenter »

PatientTrades wrote: post #22

Sensationalism at its finest. At some point we have to demand some sort of integrity from our media. This is getting out of hand. The tax plan will force schools to alter graduate tuition accounting. But "Destroy" really?

As a former Ph.D. student and now graduate, I would have to say the title is is not sensationalist at all. This aspect of the tax plan will raise additional funds (to at least partially offset the magnitude of the revenue reductions). Where do you think those funds are going to come from? They come from the graduate students who will now be taxed on these tuition waiver amounts.

It is extremely facile to just waive arms and assert that, somehow, the schools will simply get around the issue by changing their accounting. If that were the case, why would this even be in the tax bill?

Re: The GOP Tax Plan Will Destroy Graduate Education

#57

Post by rayiner »

tanderson92 wrote: post #53
rayiner wrote: post #52

Earlier quoted context omitted.

It depends on what you do with the extra revenue after you repeal. Repealing it and using the revenue to lower corporate taxes may or may not be fair (maybe it creates more jobs for lower-income people, who knows). Repealing it to increase the earned-income tax credit would almost certainly be fair. You'd be getting rid of a tax break that disproportionately benefits more privileged people, and expanding a tax break…

> Repealing it to increase the earned-income tax credit would almost certainly be fair. False. The IRS states that the EITC only applies to those over age 25 if you do not have a qualifying child (many graduate students fail both). Also, some graduate students fail the most basic tests for EITC-eligibility since they do not have "earned income" despite having taxable income. Another thing is that the tuition being ad…

The fact that graduate students may not be eligible for the EITC is irrelevant. The point is that the people who are eligible for the EITC are statistically much more likely to be underprivileged than graduate students are (as a group).

As to the plan to use the tax break to fund corporate tax cuts, it depends on economic conclusions that are beyond my understanding. I tend to be of the mind that we shouldn't tax corporations at all, and focus on taxing individuals.

Re: The GOP Tax Plan Will Destroy Graduate Education

#58

Post by hcknwscommenter »

awinder wrote: post #40
blakesterz wrote: post #9

So the plan is... >> Under the new GOP tax plan, however, those tuition waivers would be taxed as regular income... Sensationalist headlines aside... Why is this being targeted in the new tax plan? Usually I can find something with a quote from someone that explains.

The reason is to balance rate decreases at the top percentile, to decrease the corporate tax rate, and to finance lost revenues from dropping the estate tax. The rest of the reasons people state are needlessly obtuse or purposefully deceptive. There’s one mathematical reason, it’s because this bill can not increase deficit past a certain amount, and so to balance giveaways to the rich we must demand more of every oth…

Bingo. I think you hit the nail on the head here. To offset the decrease in revenues expected from the upper quintiles (and the corporate tax), they need to raise revenues elsewhere. This is not a change that can be addressed by a simple accounting trick.

Re: The GOP Tax Plan Will Destroy Graduate Education

#59

Post by hcknwscommenter »

shats wrote: post #50
blakesterz wrote: post #9

So the plan is... >> Under the new GOP tax plan, however, those tuition waivers would be taxed as regular income... Sensationalist headlines aside... Why is this being targeted in the new tax plan? Usually I can find something with a quote from someone that explains.

International students earn more than 50% of graduate STEM degrees. If this made it harder for internationals to secure funding this would result in fewer overall grad students while increasing the ratio of natives. At the same time grad students will need more student loans which works nicely for the banks and/or shifts more control to government run loans. Sounds like a win/win for Trump's base.

Except it will likely have the exact opposite effect. International students often (sometimes?) do not qualify for tuition waivers, or they qualify for a reduced amount of waiver. Therefore, the bill makes it more burdensome on domestic talent and levels the playing field for international students. Expect fewer domestic graduate STEM students and more international. Is that good or bad? I have no opinion on the matter.

Re: The GOP Tax Plan Will Destroy Graduate Education

#60

Post by hcknwscommenter »

jiqiren wrote: post #2

Destroy is certainly too strong of a word to use. This tax plan would likely mean more student loan debt. That's also bad - but it isn't going to destroy graduate education.

Waivers are generally provided in graduate programs where most of the students do not accrue education debt (e.g., STEM). Thus, for most graduate students affected by this, we are not talking about "more student loan debt" being the difference. We are talking about a difference between no student loan debt (the current situation for most STEM grad students) and a great deal of student loan debt (the situation if this passes). I do not think "destroy" is too strong of a word to use.
Post reply on HN