Yet another blog post about this proposed tax plan. If you didn’t know, the government wants to tax the tuition of grad students, which we get a waiver for. Not that this was ever a joke, but its not funny anymore, you guys. Just a couple of weeks ago when this news came out, I remember reassuring myself that this could never happen. Even as I type this, I’m still trying to reassure myself that this still won’t happen. The truth is, this is way too close to being an actual thing and it makes me extremely nervous and anxious and all types of other feelings that I can’t put into words. As if graduate education and research wasn’t already a stressful enough life spot to be in?! Last week, the House voted to pass the bill. Then this week, it passed the Senate Budget Committee. AHHHHH. Two steps closer. As of now, we aren’t there yet, but are dangerously close.
This tax plan makes so many things evident to us. Those in control of the government are undermining the value of higher education. Imposing this tax plan would make it more difficult for us to pursue a graduate position.
To make things even worse, this tax plan will only contribute to the already never-ending, steady rising national debt. So why go forward with it?!
I copied this directly from the inside higher ed article which I am referencing in this blog post: https://www.insidehighered.com/news/2017/11/30/how-senate-and-house-tax-bills-would-hit-higher-education
|Education Tax Benefits||House Plan||Senate Plan|
|American Opportunity Tax Credit||Consolidates AOTC and Lifetime Learning Credit and adds a fifth year with half the benefits. Repeal of Lifetime Learning Credit would mean no tax credit for part-time students.||No changes to AOTC|
|Discharge of student debt||Discharge of student debt from death or disability would be excluded from taxable income.||No change|
|Student Loan Interest Deduction||Repeals tax deduction for interest paid on federal student loans. Under current law, borrowers can deduct up to $2,500.||Not included|
|Graduate student tuition||Eliminates Section 117(d)5 of tax code, which allows institutions to waive or reduce tuition costs for graduate students without tax implications.||No change|
|College employee dependent benefits||Would no longer exclude tuition benefits for college employees’ spouses or children from taxable income.||No change|
|Employer-provided education assistance||Would no longer exclude employer-provided education assistance from taxable income. Tax-exempt benefits are currently capped at $5,250 per year for undergraduate and graduate course work.||No change|
|Endowment Tax||Applies a 1.4 percent excise tax to private college endowments valued at $250,000 per full-time student.||Same as the House plan|
|Charitable deductions||Increases standard deduction from $12,700 to $24,000 for joint filers and from $6,350 to $12,000 for individuals. Charitable groups say the change will reduce the incentive for charitable giving to entities like colleges.||Increases standard deduction to $24,400 for joint filers and $12,200 for individuals.|
|College athletic seating rights||Eliminates rule providing for charitable deduction of 80 percent of amount paid to purchase tickets to athletic events.||Same as House plan|
|Unrelated Business Income Tax|
|Research income||Tax-exempt organizations could exclude from unrelated business tax only income from research that is available to the public.||Not included|
|Name and logo royalties||Not included||Would tax royalties a college derives from licensing its name or logo.|
|Business income taxed separately||Not included||Requires that unrelated business income be counted separately for tax purposes, meaning colleges could no longer use losses in one business area to offset tax liability for gains in another.|
|Termination of private activity bonds||Effectively eliminates tax-exempt private activity bonds that lower the cost of building for colleges.||Not included|
|Termination of advanced refunding bonds||Interest on newly issued advance refunding bonds would become taxable.||Same as the House plan|
|State and Local Tax Deductions||Deductions for state and local property taxes would be capped at $10,000. Higher ed advocates say limiting the deductions will mean less support for taxes that support community colleges and public universities.||Eliminates deduction entirely.|