A nation’s tax system is in many ways a reflection of its priorities. The United States offers tax exempt status to places of worship because of our culture’s deep ties to religion. We impose excise taxes on alcohol and tobacco in part because we want to discourage their use. The latest example is a bill set for a vote in the Senate next week. Its authors aim to drastically change how we prioritize higher education: They plan to make it unnecessarily difficult to earn a graduate degree, and in doing so, they threaten to deal irrevocable damage to scientific progress.
The so-called Tax Cut and Jobs Act, which just passed in the House, proposes to tax graduate tuition waivers, which students all across the country depend on to finance their education and training. Graduate students teach classes and often work well over 40 hours a week in the laboratory, and in return, their schools waive their tuition bills—bills that often surpass $30,000 yearly.
The tuition waiver doesn’t amount to any additional income for students, and so under current law it isn’t taxable. However, if the bill before the Senate passes in its current form, graduate students would be on the hook for taxes not only on their income but on their waived tuition bills as well. Graduate students make modest salaries—between $25,000 and $34,000 at my alma mater, Ohio State, for example. This means that they would be responsible for paying taxes on around $60,000 while only bringing in roughly $30,000. That increases a student’s monthly tax burden by at least $800.
I’m currently pursuing a PhD, and I, like many of my colleagues, don’t have an $800 margin in my monthly budget. This bill would make it nearly impossible for graduate students across the country to meet their living expenses. It would, in effect, further restrict higher education to the wealthy and, in the process, exclude thousands of highly capable students from the resources they need to develop their skills and become the next generation’s leading scientists.
By increasing the financial burden on graduate students, Congress would be striking a massive blow to our research efforts and making the United States’ scientific community much less globally competitive. Our universities attract some of the most talented students from around the world, but if this bill passes, that talent will be attracted to countries that offer livable pay.
Some universities may be able to cover their students’ tuition taxes, but these programs would be forced to admit fewer people. The result would be a net loss in both the quantity and quality of incoming graduate students.
The consequences of that loss would be tangible. Scientific research is something in which all of us invest and from which all of us benefit. Every dollar invested in the National Institutes of Health (NIH), for example, generates at least $1.70 in economic output. Plus, research benefits our health at least as much as our economy; our investments in the NIH and other scientific organizations have brought about huge leaps forward in disease prevention and treatment.
Without the daily efforts of graduate students, however, much of this wouldn’t be possible. Graduate students form the work force that drives many of our country’s greatest scientific and technological advancements.
This bill’s advocates in the House have shown that fostering scientific progress and making higher education accessible are not their priorities. Now it’s on all of us to convince our representatives in the Senate to choose more wisely.
Scott Koenig 