The tax plan approved by the U.S. House earlier this month dramatically raises taxes for graduate students who earn tuition waivers in exchange for teaching or conducting research at their universities. The House plan would tax these waivers. The Senate version of the bill exempts tuition waivers from taxes.
In my initial piece about this, posters argued the increase in the standard deduction within the House tax plan will offset the increased taxes grad students would face on their tuition waivers. However, that's not true for most grad students, as this excellent analysis by Carnegie Mellon University grad students shows.
In a guest column today, two Georgia Tech postdoctoral fellows explain why the House plan would lead to disastrous consequences for students, universities and the state of Georgia, which is in midst of pushing more students to earn undergraduate and advanced degrees in STEM disciplines. (See what an Emory grad student wrote about how this would personally affect her.)
By Nicole M. Baran and Nastassia V. Patin
The United States has long led the world in discovery and innovation. Much of this is due to our investment in scientific research, which helps us better understand the world around us. Society benefits from strong, steady investment in science by the federal government, allowing us to do everything from eradicating disease to developing groundbreaking new technologies.
One of the most important ways our government supports science is by investing in the training and education of future scientists and engineers. Last week, the House of Representatives passed the Republican tax bill, which would dramatically increase the tax burden on graduate students — our future scientists, engineers, and innovators. Graduate students take classes, but they also perform independent research in labs, develop new technologies, and teach undergraduate students.
In exchange for all of their work, students are paid a modest stipend by the university — usually just enough to live on — while they pursue their education. In addition, the tuition that they would normally be charged by the university is “waived.” Now, this tuition waiver is not treated as taxable income and students only pay income taxes on their stipend.
However, under the bill passed by the House, this tuition waiver would be taxed, too, even though the students won’t see a penny. What does this mean in practice? A student in her first three years at Emory University making only $24,000 a year would be taxed as if she made $85,000. This student would suddenly owe $12,400 in taxes — more than half of her income. Although Georgia Tech charges lower tuition, an out-of-state student would still see his tax bill double to over $3000 a year.
This tax proposal would prevent everyone except the independently wealthy from pursuing an advanced degree. You can’t squeeze water from a rock. Students may be forced to take a second job just to pay their taxes, which would distract them from their classes, research, and teaching.
It is worth putting this tax “reform” into perspective. The $850 million that the government stands to make by raising taxes on the nation’s 145,000 graduate students is less than half of what one wealthy family — for example, that of Secretary of Education Betsy DeVos — would make from the proposed estate tax cut.
We are both postdoctoral researchers working in the School of Biological Sciences at Georgia Tech. We were able to complete our Ph.D.’s only because of the existing tuition waiver. As a graduate student, Dr. Baran researched the role of hormones in the brain and how they shape social bonds and vocal learning. This work has important implications for understanding illnesses like autism spectrum disorder. In her Ph.D., Dr. Patin studied bacteria that naturally make antibiotics, an important potential source of new drugs to combat the current antibiotic resistance crisis. These are just two examples of the kind of research graduate students perform every day in labs across the country, including Emory University, Georgia State University, and Georgia Tech.
As scientists at the beginning of our careers, we are deeply concerned that our nation is in danger of losing its place as a global leader in science and innovation. Graduate students already sacrifice several years of earning potential in order to complete their training. The challenges facing our nation are great, and budding scientists — regardless of their background — should be given the chance to contribute their talents.
We urge our Georgia members of Congress to oppose the tax bill and ensure that scientists and engineers can continue to be the engine of American discovery and innovation.
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