GOP wants to tax waived income for grad school

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What the actual fuck?

The typical tuition waiver is on the order of $30,000 to $50,000 a year. The typical stipend is $15,000 to $25,000.

If you're making $20,000 a year, you can't afford to pay the taxes of a person making $70,000 a year.

It seems like this was almost explicitly designed to punish young people or to cripple the ability of universities to teach and do research. Is the US government deliberately trying to cause a brain drain?

kiri3tsubasa:

Sure, back in 2014 I had student loans, they were forgiven by then president obama, however when I filed my taxes for the next year I learned that the debt forgiveness was classified as income and I had to pay taxes on that. So yeah, no real difference.

There's a pretty real difference, because we're talking adding $5,000 to $10,000 per year to the tax burden of people who are making in the ballpark of $20,000 a year.

inu-kun:

All those people raking millions out of their gender studies degree should be taxed already in university to bring the most out of the poor people who do not have the time or grades to go to college.

I need to ask, you are aware that gender studies isn't the only major, right? Because this tax plan is also going to hit medical students and science and engineering students, and have a spillover effect that kneecaps the entire academic system and its ability to train people.

And yes, I'm aware that the current political zeitgeist likes the idea that it's "destroying" things that upset it (in this case, the concept of education, apparently, which is telling but not at all surprising), but I'm not exactly looking forward to a worsening of the labor shortage in technology and medicine.

Addendum_Forthcoming:
Well that's one way to annihilate the scientific community... Christ. Why? Graduate researchers and post-docs basically find out half the shit there is in scientific research and exploration.

You just said it right there: they're the ones doing the leg work in the process of discovery, remove them and that process can't happen. That is precisely what they want.

There are people for whom science is inconvenient. This was true with the tobacco industry, and it's true today for the fossil fuel industry, the alcohol industry, the junk food industry, the firearms industry, the religious lobby, anti-progressive groups, reactionaries, and in general anyone who's ever told a convenient lie to keep someone else in line because they've decided that they want the world to stop changing. By no coincidence, all of those groups are currently represented in the federal government.

renegade7:

You just said it right there: they're the ones doing the leg work in the process of discovery, remove them and that process can't happen. That is precisely what they want.

There are people for whom science is inconvenient. This was true with the tobacco industry, and it's true today for the fossil fuel industry, the alcohol industry, the junk food industry, the firearms industry, the religious lobby, anti-progressive groups, reactionaries, and in general anyone who's ever told a convenient lie to keep someone else in line because they've decided that they want the world to stop changing. By no coincidence, all of those groups are currently represented in the federal government.

A lot of scientific research is in the hands of places like Singapore, Hong Kong, etc. The brain drain of the West is leading to systemic problems of old conceptd of geostrategy. Having the best and brightest always allows a nation to punch above its weight class. The death knell of any civilization is the public ending of any attempts of rewarding and showing good faith towards people of talent regardless of their socioeconomic background.

The cost is so utterly easy to rationalize, it shouldn't be difficult to explain to people why you shouldn't tax already exorbitant debt waiving they hold when you have wage stagnation already. Because it doesn't matter how much you could pay researchers, it wouldn't be enough and neither is there the labour market to provide them with jobs that will fulfill it satisfactorily to do so.

Your average scientist doesn't earn millions of dollars... they don't earn 6 figures, even. At best a middling 5.

And in the end who does this really benefit?

This is how you get conspiracy theories of lizard people running government. Because at this point it's hard to imagine these legislators don't live off schadenfreude. It's hard to imagine these fuckwits as anything less than schoolyard bullies calling pauper students 'nerds' and then throwing them in the school dumpster, and the principal is letting them get away with it.

kiri3tsubasa:

Vendor-Lazarus:

kiri3tsubasa:
Sounds just like what the democrats did a few years back with their debt forgiveness for college students. The forgiven debt was classified as income and they were taxed on it. Really seems like another case of "its different when we do it"

I have to ask. Is this sarcasm?
I get that whatever one side seem to hate, one feels compelled to defend , but do you really believe that taxing waived income is a good thing?

Could you explain your reasoning to me, in a plainer manner, if it's not too much trouble?

Sure, back in 2014 I had student loans, they were forgiven by then president obama, however when I filed my taxes for the next year I learned that the debt forgiveness was classified as income and I had to pay taxes on that. So yeah, no real difference.

I'm sorry, there seems to have been a mix-up. That question was meant for Inu-kun. Only the links were for you.
I do appreciate you answering anyway, to see where you are coming from and I have to agree that I don't really see any difference either.

Can anyone explain what the actual difference between student debt loan forgiveness tax and waived tuition fee income tax is?

kiri3tsubasa:

Sure, back in 2014 I had student loans, they were forgiven by then president obama, however when I filed my taxes for the next year I learned that the debt forgiveness was classified as income and I had to pay taxes on that. So yeah, no real difference.

So you were essentially given a "gift" (i.e. a debt write-off), but were not given the full amount equal to your debt. So this one-off event gave you a net positive.

On the other hand, other people now have to pay taxes when they didn't before, meaning what once they got for nothing, they now have to pay for. So they are getting a net negative.

So it's not really the same, is it?

Grants of any kind are not payment income. They are funding for a specific thing, released benefits whose monetary amount is only good for certain redeemable services. It's only slightly more actual income than Bitcoins, in that they are vouchers and Bitcoins are a scam.

Agema:

kiri3tsubasa:

Sure, back in 2014 I had student loans, they were forgiven by then president obama, however when I filed my taxes for the next year I learned that the debt forgiveness was classified as income and I had to pay taxes on that. So yeah, no real difference.

So you were essentially given a "gift" (i.e. a debt write-off), but were not given the full amount equal to your debt. So this one-off event gave you a net positive.

On the other hand, other people now have to pay taxes when they didn't before, meaning what once they got for nothing, they now have to pay for. So they are getting a net negative.

So it's not really the same, is it?

err....it is exactly the same thing. In both scenarios a debt or fee is being forgiven or waived. It would only be a net negative if the taxes on that new income exceed the income itself. In both scenarios, it is still a net positive in comparison to paying off the debt or the tuition.

Keep in mind, i dont exactly AGREE with these changes (graduate students and students in general are not exactly in a great economic state), but mechanically if debt forgiveness counts as income then tuition being waved can also count as income. One is a natural consequence of the other. Not to mention, according to how the supreme court defines income waved tuition can count as it falls under the "ascension to wealth."

Now i dont know why debt forgiveness counting as income was pushed in the first place. I can not find an act or law or any article discussing changing it. It could be democrats wanted to prevent companies from having debt forgiveness as a tax dodge

erttheking:
That is to say, if you make 30,000 a year on your stipend, and got 45,000 a year tuition waived, the GOP wants to tax you like you make 85,000 a year.

Eh, do you mean 75,000? (insert witty joke about all that education paying off here)

Well, that is shit, but so is having a theoretical tuition fee of 45,000 a year. I mean, how can anyone even begin to justify that?

Taxing the stipend I would be fine with, though. It irked me that staying in academia would have been more financially advantageous to me than getting a proper job (in the short term), because of the tax and student accommodation arrangements. Why should research students not contribute to society via taxes? It is essentially a job, after all.

EDIT - also, to go full devil's advocate, would people still have an issue with this if the government was insisting taxes were paid on the full value of a car which the manufacturer gave to an employee for free? Because that is the equivalent transfer of assets we are talking about here.

Catnip1024:

erttheking:
That is to say, if you make 30,000 a year on your stipend, and got 45,000 a year tuition waived, the GOP wants to tax you like you make 85,000 a year.

Eh, do you mean 75,000? (insert witty joke about all that education paying off here)

Well, that is shit, but so is having a theoretical tuition fee of 45,000 a year. I mean, how can anyone even begin to justify that?

Taxing the stipend I would be fine with, though. It irked me that staying in academia would have been more financially advantageous to me than getting a proper job (in the short term), because of the tax and student accommodation arrangements. Why should research students not contribute to society via taxes? It is essentially a job, after all.

EDIT - also, to go full devil's advocate, would people still have an issue with this if the government was insisting taxes were paid on the full value of a car which the manufacturer gave to an employee for free? Because that is the equivalent transfer of assets we are talking about here.

It is an actual job for PhD students in Europe but then you get, somewhat depending on the exact country and arrangement, actual retirement benefits, 4 years of job security, employee rights, and the like. From everything I hear, the terms for research students in the US (as well as PhD's on some non-standard arangements here) are exploitative as fuck as is, no need to make that worse.

As for your devils advocacy. I think it depends. Do you need that car for the job? Because where I live public transportation is pretty good. Taxes should in any case be reasonably payable. If the taxes on a job (or whatever an american grad student has) are so high as to make it pretty much impossible not to accumulate debt, they are too high. The car on the job is probably better taxed on the employers side of things if you want to tax it. That would make a lot more sense.

Fully agreed on the 45000 tuition fee. I pay 2000 a year as a student, and if the state wouldn't chip in I'd pay 10000 a year. I just don't see how one can reasonably ask for 45000 dollars tuition. That is insane.

Pseudonym:
It is an actual job for PhD students in Europe but then you get, somewhat depending on the exact country and arrangement, actual retirement benefits, 4 years of job security, employee rights, and the like. From everything I hear, the terms for research students in the US (as well as PhD's on some non-standard arangements here) are exploitative as fuck as is, no need to make that worse.

As for your devils advocacy. I think it depends. Do you need that car for the job? Because where I live public transportation is pretty good. Taxes should in any case be reasonably payable. If the taxes on a job (or whatever an american grad student has) are so high as to make it pretty much impossible not to accumulate debt, they are too high. The car on the job is probably better taxed on the employers side of things if you want to tax it. That would make a lot more sense.

Fully agreed on the 45000 tuition fee. I pay 2000 a year as a student, and if the state wouldn't chip in I'd pay 10000 a year. I just don't see how one can reasonably ask for 45000 dollars tuition. That is insane.

Yeah, I admit that I am seeing things from a European perspective, and have no idea how the US arrangements work.

The car in this example would be the equivalent of a job bonus. I know that cash income bonuses are taxed, so I imagine the transfer of assets would be as well - although this would likely be absorbed by the company (I dunno, I'm hypothesising about a fictional company. But it sounds like an awesome place to work).

Catnip1024:

EDIT - also, to go full devil's advocate, would people still have an issue with this if the government was insisting taxes were paid on the full value of a car which the manufacturer gave to an employee for free? Because that is the equivalent transfer of assets we are talking about here.

I would call bullshit on taxing the use of a company car.

And I'd call bullshit on taxing scholarship money used for tuition, a more applicable analogy.

Catnip1024:
The car in this example would be the equivalent of a job bonus. I know that cash income bonuses are taxed, so I imagine the transfer of assets would be as well - although this would likely be absorbed by the company (I dunno, I'm hypothesising about a fictional company. But it sounds like an awesome place to work).

They actually are taxed at least here.

But the problem is more that the US doesn't seem to treat junior researcher (we are talking about people who already have their master) as a job that gets payed and taxed but insists that those researchers are "students", needing to pay the tution that then gets automatically waived.

Only to be able to have other postgraduates no one would want to hire as researches who actually do pay for their stay at a prestigious school.

altnameJag:
I would call bullshit on taxing the use of a company car.

And I'd call bullshit on taxing scholarship money used for tuition, a more applicable analogy.

It's not a company car. It's the equivalent of a cash bonus. The difference being you technically aren't allowed to use a company car for non-work purposes, and you never technically own the company car.

The scholarship is debatable - I can see a case for the institution being obliged to pay a tax on the value. The bigger issue is the obscene value of it in the first place. The stipend, I can't see why people should not be taxed on it, personally. It is the direct equivalent of a wage. If it isn't enough, the institutions should be paying more. Maybe screwing over the students is why the US is having to hire in so much in the way of foreign talent.

Satinavian:
But the problem is more that the US doesn't seem to treat junior researcher (we are talking about people who already have their master) as a job that gets payed and taxed but insists that those researchers are "students", needing to pay the tution that then gets automatically waived.

Only to be able to have other postgraduates no one would want to hire as researches who actually do pay for their stay at a prestigious school.

Yup. In my head, PhD and onward should be treated as an actual job. You receive money to do it, therefore it is paid work. You should not have to pay "tuition" for paid work.

Ryotknife:
err....it is exactly the same thing.

Yes, it is by technical mechanism the same thing. However in practical terms, one is lowering financial pressure due to higher education, whereas the other is increasing it.

In much the same way, income tax could be increased by 10% on the rich or the poor. Arguing it's the same thing because it's the same mechanism is totally missing the really important point.

Catnip1024:

altnameJag:
I would call bullshit on taxing the use of a company car.

And I'd call bullshit on taxing scholarship money used for tuition, a more applicable analogy.

It's not a company car. It's the equivalent of a cash bonus. The difference being you technically aren't allowed to use a company car for non-work purposes, and you never technically own the company car.

I mean, a tuition waiver is a "cash bonus" that can be rescinded at any time, and only works while the person is employed by the "company", i.e. "can't be used for non-work purposes".

altnameJag:

Catnip1024:

altnameJag:
I would call bullshit on taxing the use of a company car.

And I'd call bullshit on taxing scholarship money used for tuition, a more applicable analogy.

It's not a company car. It's the equivalent of a cash bonus. The difference being you technically aren't allowed to use a company car for non-work purposes, and you never technically own the company car.

I mean, a tuition waiver is a "cash bonus" that can be rescinded at any time, and only works while the person is employed by the "company", i.e. "can't be used for non-work purposes".

Well, continuing the devils advocacy, one could argue that education - what the cash is spent on - is a permanent thing which stays with one regardless of where you work. So while your current employer does benefit, you personally benefit the most.

inu-kun:

erttheking:

inu-kun:
BUT TAXES ARE GOOD FOR THE UNDERPRIVILAGED, NO???

Caps lock doesn't make your point stronger, and I'll have to ask who said that taxes would help the underprivileged when they were the ones being taxed. That seems to mainly be a GOP "trickle down economics" mindset, and it's still BS.

But university is the pathway to being successful in life! All those people raking millions out of their gender studies degree should be taxed already in university to bring the most out of the poor people who do not have the time or grades to go to college.

Okay, fine, the Gender studies people are going to be fine. We can cross them off the list, but we got quite a list to go through...

*AHEM*

Now, how about the nursing students?

renegade7:

I need to ask, you are aware that gender studies isn't the only major, right?

He's a conservative. They think that gender studies is all college students do anymore. Nursing, broadcasting, engineering, none of those exist anymore since the SJW's took control of all higher education.

Catnip1024:

altnameJag:

Catnip1024:
It's not a company car. It's the equivalent of a cash bonus. The difference being you technically aren't allowed to use a company car for non-work purposes, and you never technically own the company car.

I mean, a tuition waiver is a "cash bonus" that can be rescinded at any time, and only works while the person is employed by the "company", i.e. "can't be used for non-work purposes".

Well, continuing the devils advocacy, one could argue that education - what the cash is spent on - is a permanent thing which stays with one regardless of where you work. So while your current employer does benefit, you personally benefit the most.

...you do from on the job experience too, so what's your point?

Catnip1024:
The stipend, I can't see why people should not be taxed on it, personally. It is the direct equivalent of a wage.

In practice, I suspect, because a great deal of educational stipends are ultimately paid for by the state. So the state is merely taxing back what it has given in the first place, which is a little inefficient. Likewise, if stipends must be increased to cover taxation, then the state needs to start funding stipends more.

Traditionally, the basic difference between a stipend and a salary is that in the former case, you're not an employee. That already can make a lot of difference in terms of status. A lot of grad students will not be employees of the university; the "work" they do is mostly their education with some voluntary teaching work that exists outside contractual obligation. Although, granted, with relevance to your argument, in some cases this is potentially splitting hairs.

altnameJag:
...you do from on the job experience too, so what's your point?

Experience is a side effect of you working - your company isn't paying you because you are getting the experience. Education is the main purpose of you being taught. That's the difference. And if you call it a tuition fee, it is teaching in theory at least.

Agema:
In practice, I suspect, because a great deal of educational stipends are ultimately paid for by the state. So the state is merely taxing back what it has given in the first place, which is a little inefficient. Likewise, if stipends must be increased to cover taxation, then the state needs to start funding stipends more.

Traditionally, the basic difference between a stipend and a salary is that in the former case, you're not an employee. That already can make a lot of difference in terms of status. A lot of grad students will not be employees of the university; the "work" they do is mostly their education with some voluntary teaching work that exists outside contractual obligation. Although, granted, with relevance to your argument, in some cases this is potentially splitting hairs.

To be honest, I think it would make a lot more sense for research students to be treated as staff. Workers rights, no need to come up with bullshit "tuition fee" costs to waive.

Now, I admit, I'm not an expert in general university research funding. The bits that I have come into contact with (from the engineering world) tend to be industry subsidised and heavily industry focused. At which point it arguably makes sense again to tax it, because otherwise the company funding the research is essentially dodging the tax that would be paid by the staffers who would be otherwise doing the research (at a much more laid back pace, with plenty of coffee breaks).

At the end of the day, not taxing research stipends is artificially boosting research. That is arguably a good thing, because research is good. It is arguably a bad thing, because it denies students rights that the equivalent workers would receive. There's an argument both ways. And none of it changes the fact that taxing someone on money they never got kind of shows how fucked up the system currently is.

Catnip1024:

altnameJag:
...you do from on the job experience too, so what's your point?

Experience is a side effect of you working - your company isn't paying you because you are getting the experience. Education is the main purpose of you being taught. That's the difference. And if you call it a tuition fee, it is teaching in theory at least.

Are you in favor of taxing tuition scholarships like they were income? Because that's what we're talking about here.

Doubly so when you realize that grad students are the ones doing the grunt work for research for the university. They're basically employed, and stipends and such not going directly to tuition are already taxed. Like, yeah, my old roommate got a tuition waiver to go to school. That also involved working for the paleontology department by researching fossils.

altnameJag:
Are you in favor of taxing tuition scholarships like they were income? Because that's what we're talking about here.

Doubly so when you realize that grad students are the ones doing the grunt work for research for the university. They're basically employed, and stipends and such not going directly to tuition are already taxed. Like, yeah, my old roommate got a tuition waiver to go to school. That also involved working for the paleontology department by researching fossils.

Not at all. I'm pointing out that having a system where people who are effectively employees have to pay an arbitrary "tuition fee" is fucked up. This is a direct result of that system.

(In the UK, the stipend is tax free. This may have caused some confusion above?)

So, step one for the Republicans has been accomplished

Still up to the House and the Senate to reject it.

So, when Tuitions does nothing but go up, and people can't afford these numbers while having a family or because they don't have jobs that pay that well in the first place... Who are going to fill the graduate positions that will be open?

I think we know the answer, but I would love to see the mental gymnastics.

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