A graduate student demonstrates how her tax burden would increase by nearly $10,000 if the House version of the Tax Cuts and Jobs Act became law. Photo: Amanda Rose

A graduate student demonstrates how her tax burden would increase by nearly $10,000 if the House version of the Tax Cuts and Jobs Act became law. Photo: Amanda Rose

Update (December 6, 2017): On December 2, the Senate passed their version of tax reform legislation. The tax bill will now go to a conference committee to either pass the Senate version as is or reconcile differences between the versions passed by the House of Representatives and the Senate.

The House’s version of the bill still contains a provision that would tax graduate students on tuition waivers received for working as either teaching or research assistants at a university (see post below for more detail). This provision would make it difficult for students coming from middle-to-low income families to attend graduate school, which would suffocate the pipeline of bright students who greatly contribute to American economic competitiveness. This provision cannot prevail. Graduate students around the country are participating in walkouts at their universities and lobbying congress in protest.

On November 16, the House of Representatives and the Senate Finance committee voted to advance tax reform legislation. These bills, both of which are named the “Tax Cut and Jobs Act,” propose to disproportionately and negatively impact the middle class, threaten to leave millions of Americans without health coverage, would add as much as $1.5 trillion to the deficit, and could burden graduate students with a giant tax hike.

The version passed by the House of Representatives includes a new tax provision that would require students to pay tax on the value of the tuition that is waived for graduate student research and teaching assistants. Given the low pay of such positions, this would make it nearly impossible to pay cost of living expenses while attending graduate school. As a former graduate student myself, and having been a teaching and research assistant, I understand how critical every dollar of a stipend is to purchase groceries, pay rent, and maybe even take care of your own health (if you can afford it).

The Tax Cut and Jobs Act is an attack on higher education in more ways than one. It also proposes to repeal the student loan interest reduction, graduate student tuition waivers, the Hope Scholarship Credit, the Lifetime Learning Credit, and other educational assistance programs. But it isn’t just graduate students who will feel the consequences; such moves stand to affect us all.

Science is linked to economic prosperity

Investment in science is investment in our nation. Many international comparisons still place the US as a leader in applying research and innovation to improve the country’s economic performance. A prior review by the Organization for Economic Co-operation and Development (OECD) concluded that since World War II, United States leadership in science and engineering has driven its dominant strategic position, economic advantages, and quality of life. Indeed, researchers have long understood that there is a link between economic prosperity and investment in science and technology.

The leadership of the United States in science explains, in part, why the country is ranked as one of the most economically competitive nations in the world. Across a number of metrics, the United States is still the undisputed leader in basic and applied research.

Researchers in the United States lead the world in the volume of research articles published, as well as the number of times these articles are cited by others. The United States is not just producing a lot of raw science, it also is applying this research and innovation, as other metrics show.

The United States has a substantial and sustainable research program, as evidenced by the number of Ph.D. students trained; it invests heavily in research, as shown by the country’s gross domestic expenditure on research and development; and it is a leader at turning science into technology, as evidenced by the high number of patents issued.

Graduate students are critical to US science and innovation

If the production of science has helped the United States economy remain competitive, graduate students are largely to thank. They are pivotal to the production of novel science and innovation in the US, and they are also the professors, inventors, and innovators of the future that our economy depends on.

The Tax Cut and Jobs Act would make it difficult, if not impossible, for many of the brightest minds in America to enter into science, technology, engineering, and mathematics (STEM) fields, ultimately decreasing America’s international competitiveness in science and technology.

A provision in the Tax Cut and Jobs Act passed by the House of Representatives would tax graduate students on their tuition costs. This would reform the Internal Revenue Service tax code, section 115(d), which allows universities to waive the cost and taxation of tuition for graduate students who conduct research or teach undergraduate classes at approved universities.

An estimated 145,000 graduate students benefit from this reduction with 60 percent of these students in STEM fields. Thank goodness such provisions exist for tuition waivers and scholarships as even some of our senators likely wouldn’t be where they are today without this benefit in our tax code.

If graduate students were taxed on waived tuition, many who serve as research or teaching assistants would find it more difficult to cover basic living expenses with the stipend they receive. For example, a graduate student at Columbia University might receive $38,000 for a stipend and a tuition waiver for $51,000. Currently, they pay $3,726 in taxes, but that could go up to $13,413 under the House’s proposed legislation reducing their monthly take home pay for food, rent, and health from $2885 to $2078.

Some students have reported that they would see their stipends cut from $27,000 to $19,000, or from $13,000 to $8,000 for the year if the House’s tax reform bill became law. While some students may be able to depend on their families to defray the costs of these taxes, many graduate students who come from poor and middle class backgrounds could not. As the majority of Americans who come from poorer backgrounds are also minorities, this would deter diversity in higher education, where we already know it is sorely needed.

Some universities could cover tuition and the tax on that tuition for some students, but they wouldn’t be able to do it for all. Taxation of tuition waivers also would likely make the US less attractive to international students, many of whom are graduate students in STEM. Ultimately, this regressive tax legislation means fewer graduate students at universities and, therefore, decreased research in the United States.

An anti-science message is in the air

If you are surprised that graduate students are being targeted, you are not alone. Many organizations who support the higher education community have signed on to letters and published statements expressing concerns for graduate students, including the American Council on Education, the Association of Public and Land Grant Universities, the Association of American Universities, the American Association for the Advancement of Science, and the Union of Concerned Scientists.

It is unclear if a final version of a tax reform bill will include provisions that burden graduate students with enormous tax hikes. While the Senate’s version of a tax reform bill would retain many of the tax benefits for undergraduate and graduate students (including a non-taxable tuition waiver), it still includes many provisions opposed by organizations supporting higher education.

Regardless of what tax reform bill is pushed through, there is still the question of why the House targeted graduate students in the first place? Is it because they are an easy target having little representation on the hill? Is it because this would be one way to dismantle the pipeline of those pesky academics?

These are Americans who work hard to teach and produce transformative research that greatly benefits the United States economy–and they already do this for very little pay. Furthermore, the amount of money that the government would gain from these taxes has been said to be “miniscule” compared to trillions of dollars in national debt. It is absurd that graduate students are being targeted.

Speak up for all scientists now and in the future!

I’m a former graduate student and I would not have been able to afford graduate school if I had to pay tax on my graduate student tuition and certainly wouldn’t be where I am today without this benefit in our tax code. That’s why I’m speaking up for all the early career scientists now and in the future–everybody deserves the same opportunities that I had, and the United States deserves the continued prosperity that science affords it.

Call your senators today at 1-833-216-1727 and urge them to vote ‘no’ to the Tax Cut and Jobs Act.

The full Senate will vote on this bill after Thanksgiving. Learn more about the current tax reform legislation and how you can push back.

Posted in: Science and Democracy Tags: Tax Cuts and Jobs Act



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