Archive for Monday, November 27, 2017

Letter to the editor: Unfair ‘income’ tax

November 27, 2017

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To the editor:

On Nov. 16, the House of Representatives passed the Tax Cuts and Jobs Act. The bill does several things, including cut tax rates and repeal deductions. I support these concepts wholeheartedly.

However, there is one provision in the act that I just as strongly object to: the tax on tuition waivers.

In most doctoral programs, we as graduate students are compensated in two ways. First is a stipend from employment as a research or teaching assistant. The second is a tuition waiver. In other words, graduate students are paid a (quite modest) salary and do not pay tuition. There are nearly 175,000 of these waivers at graduate schools around the country. Currently, these waivers are not taxable income, just like employer health insurance premiums. Under the act, these waivers will be counted as taxable income. The impact of this new tax would be devastating.

The first reason is self-evident: Many graduate students cannot afford the tax burden. Nearly 60 percent of graduate students have incomes below $20,000. Taxing tuition waivers would more than double the tax burden of many graduate students. Many of us would have to borrow student loans just to pay taxes on “income” we never see.

This will have a disproportionate impact in Kansas, where institutions like Kansas State University, KSU Polytechnic, the University of Kansas, Wichita State University and KU Med all rely heavily on graduate students to do the kinds of research that will lead our great state into prosperity long into the future.

Comments

Chris Anderson 2 weeks, 6 days ago

As far as I know, the tax bill doesn't propose taxing need- or merit-based scholarships. So, it would seem the simple solution is to de-couple graduate student employment from "tuition waivers", aka merit scholarship. Instead of universities offering an inseverable package of salary for work and tuition waiver -- both arguably income under the tax bill, graduate students would be offered a merit scholarship and an offer to work for pay, and acceptance of the former would not require acceptance of the latter. Of course, this would shift the bargaining power to graduate students, who might just decide to forgo the pittance they make in exchange for grading, TAing, RAing, etc. and instead focus on their own scholarship. Overall, the effect might be to increase the welfare of graduate students, who would enjoy the freedom to say "no thanks" to what some might view as coercive employment or be paid more and more equitably for it when they choose to say "yes."

Brock Masters 2 weeks, 6 days ago

Makes you wonder who proposed this change? I agree, leave it alone.

Bob Summers 2 weeks, 6 days ago

The sooner people with no skin in the game start paying their fair share, the sooner everyone's taxes go down.

People with no skin in the game are killing society.

Killing.

Calvin Anders 2 weeks, 6 days ago

I think it's incredibly stupid to make it harder for graduate students to finance their education and just as dumb to make it harder for Universities to incentivize graduate student employment to help the teaching load. But arguing the merits of this particular deduction misses the larger issue. This tax "reform" effort is a Republican effort to cut taxes for the wealthy and pay for it by running up the debt and increasing taxes on the middle and lower middle classes. Legislators care more about pleasing donors than keeping smart targeted tax waivers in place. So, it really doesn't matter how sound and well reasoned the argument is to retain this waiver. Republicans have their fingers firmly in their ears and will just continue to chant their flagrantly false talking points as they push to drive these tax cuts for the wealthy through the process.

Doug Weston 2 weeks, 6 days ago

"The bill does several things, including cut tax rates and repeal deductions. I support these concepts wholeheartedly."

Somewhat hypocritical that Mr. Abbott wholeheartedly supports the concept of repealing tax deductions, but opposes the part of the tax bill that is goring his ox.

Ken Lassman 2 weeks, 5 days ago

True; instead perhaps he should have asked for a decrease in tax rates, like the folks making over $75,000 are going to be receiving, which will more than make up the loss of those loopholes. At least that's what the Congressional Budget Office concluded yesterday when they released their analysis of the impact of the proposed tax reforms. Anyone making less than $75,000 will see a net loss by 2027 from their current tax burden AND government services, i.e. more expensive healthcare costs, higher tax burden, or both. Anyone who thought this was about giving the middle class a tax break and not a break for the really wealthy folks should examine the CBO report.

Kyle Abbott 2 weeks, 4 days ago

Tuition waivers are not considered income under current law. It's not a "deduction." H.R.1 would redefine income for that purpose. That's what I oppose.

Gary Stussie 2 weeks, 4 days ago

"Anyone making less than $75,000 will see a net loss by 2027..." Ken does not mention that the reason the tax break sunsets is because it is the only way the package can get past the DEMs obstructionism. The Bush tax cuts had the same sunset ... Obama extended it. The same is expected in this case.

The Tax Cut for the Rich is standard liberal crap.

Do some research ...Top earners pay a disproportionately large share of the federal tax burden.

The top 10 percent pays 53.3 percent of ALL federal taxes. When looking at just federal income taxes, they pay 68 percent of the burden.

The top 1 percent pays 24 percent of all federal taxes compared to 35 percent of all federal income taxes.

Ken Lassman 2 weeks, 4 days ago

And Gary does not mention that the GOP has purposely taken the One Party State approach to passing legislation so that any type of bipartisan effort is off the table. This is not the way that legislation used to be crafted and implemented, and when the Dems tried it on the Republicans, the GOP howled and howled.

This is not the way to run a Republic or a Democracy. Such approaches should be rejected out of hand as they are fundamentally flawed and set up a disloyal opposition that will obstruct at every turn even if the legislation is passed. Anyone, Dem or GOP, who approaches legislation in this manner, should be called to the carpet and thrown out of office if they persist.

If we cannot pass bipartisan tax reform, then we shouldn't pass it--period. Bob Dole would agree, by the way.

Bob Smith 2 weeks, 4 days ago

"....Such approaches should be rejected out of hand as they are fundamentally flawed and set up a disloyal opposition that will obstruct at every turn even if the legislation is passed. Anyone, Dem or GOP, who approaches legislation in this manner, should be called to the carpet and thrown out of office if they persist...." That's how we got the ACA.

Ken Lassman 2 weeks, 4 days ago

Exactly. That's why it doesn't matter which party does it: it's wrong. One Party State rule almost always brings out the brutality in the dominant party and the good ideas that both parties have are not seen as a reason for finding common ground but instead are demonized and seen as tainted because of their origins in the other party. Such thinking is clearly dangerous to a democracy and is the opposite of the sentiment that aspires to "make a more perfect union."

That's why Bob Dole was so successful: he was highly partisan but in a bipartisan kind of way--see his excellent Bipartisan Policy Center website here: https://bipartisanpolicy.org/person/senator-robert-j-dole/

Richard Heckler 2 weeks, 4 days ago

For the past 40 years, the financial and political elite of this country have rigged the tax code.

The result: we are moving rapidly toward an oligarchic form of society in which the top 1 percent is doing phenomenally well, the middle class continues to decline and 40 million Americans are living in poverty.

And it will probably not surprise you to learn that just as our tax code benefits the wealthiest people in this country, it also benefits some of the largest and most profitable corporations in the world with a myriad of tax breaks, deductions, credits and other loopholes. As a result, one out of five large profitable corporations today pays nothing in federal taxes.

The current Republican “tax cut” bill, paid for by the Koch brothers and other billionaire campaign contributors, continues the push to make the rich richer at the expense of everyone else. It would raise taxes on middle class families making $75,000 a year or less and would throw 13 million Americans off of health insurance.

And it would do all of these things to provide permanent tax cuts to the wealthiest Americans and profitable corporations that ship American jobs to China while moving their American profits to the Cayman Islands.

But let's be clear. This legislation goes well beyond taxes. Its ultimate goal is to radically transform American society and the role that government plays in the lives of the working families of our country. This legislation will increase the deficit by at least $1.5 trillion over ten years. Mark my words.

If passed, the Republicans will then rediscover the "deficit crisis," and push aggressively for massive cuts in Social Security, Medicare, Medicaid, education – higher education in particular – nutrition, affordable housing and more. They will seek to undo every major piece of legislation passed in the last 80 years designed to help working families, the elderly, the children, the sick and the poor.

Richard Heckler 2 weeks, 4 days ago

This scam isn’t about helping working families. It’s about helping wealthy Republican donors who promised millions of dollars in campaign contributions in return for billions of dollars in tax giveaways.

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