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Christopher R. Marsicano

Marsicano

American higher education is the envy of the world, but universities in other countries are catching up.

This year, for the first time in its 14-year history, the Times Higher Education ranking of international universities named two non-U.S. institutions best and second-best in the world.

Third and fourth place went to two California institutions, Cal Tech and Stanford. Recent projections from the Organisation for Economic Co-operation and Development suggest that China will outpace the U.S. in research and development spending in just two years. If the U.S. wants to keep its competitive edge, it must increase support.

The GOP’s tax plans do the exact opposite. In fact, they may upend graduate education and research altogether.

While some proposed changes to the tax code may benefit research and innovation (the reduction of the corporate tax could allow companies to spend more on R&D) both the House and Senate reform bills are likely to hurt universities. Both bills would make it harder to itemize charitable contributions, an action that could reduce giving to nonprofit universities and other organizations by as much as $13 billion annually. They also both include a 1.4 percent tax on investment returns at private, nonprofit institutions that enroll at least 500 students and have endowment assets in excess of $250,000 per student — a provision that likely will affect the Claremont Colleges.

But the House bill, on the whole, is worse for higher education. It would tax tuition waivers for graduate students and university employees.

Universities fund doctoral education in multiple ways. Many Ph.D. students receive a fellowship or scholarship that covers their cost of living in return for working as teaching or research assistants. Graduate students with fellowships are supposed to spend between 20 and 40 hours a week working while also attending classes and performing research. Some doctoral students pay tuition for those classes, but as many as a quarter of all graduate students receive a waiver. (Nominal tuition at a well-resourced university could easily cost more than $50,000 dollars a year.)

In the current tax code, the government can tax certain types of fellowship funding but does not tax tuition waivers. The House version of the bill would change that.

Many graduate students struggle to make ends meet. In cities with a high cost of living, their $25,000 fellowships are just enough for rent, gas and food. Removing the tuition waiver exemption from the tax code would increase their cost of living dramatically. When a $50,000 tuition waiver is included as taxable income, students who take home only $25,000 per year would be taxed as if they made $75,000 per year. For many students, that would mean a 400 percent increase in their taxes.

In effect, removing the exemption creates a grad student tax.

This is personal for me on multiple levels. First, I’m a graduate student. Second, I teach an undergraduate public policy course — I’m supposed to train the next generation of leaders how to make effective public policy. One of our class units focuses on taxation. I teach my students that governments tax the behaviors they want to discourage but provide incentives for the behaviors they want to encourage. For this reason, states tax alcohol, raising the price on something that, in excess, hurts the public.

Why then, do we want to tax graduate education? If anything, we should do more to incentivize talented individuals to attend graduate school, struggle through learning difficult research methods and apply those methods to the real world.

Graduate students do important work. For the most part, we don’t go to graduate school to increase our earning potential. We go because we care deeply about answering questions and solving problems of all sorts. Students don’t research cancer for the money; they research cancer to find a cure. They don’t study psychology simply because the subject interests them; they do it to understand and help prevent criminal behavior. Taxing tuition waivers doesn’t just make our research harder; it makes it all but impossible.

Christopher R. Marsicano is a Ph.D. candidate at Vanderbilt University who studies higher education politics and policy. He wrote this for the Los Angeles Times.

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(6) comments

Redwall

The education industry is going to have to restructure its finances and its products. The gravy train is over: the cost of education now exceeds the benefits for most students.

The constant building of 4-star hotels as dorms, a local chancellor who crows his new science building is the most expense ever built in the UW System, and a multimillion $ green house that sits empty and without an accompanying academic program are all signs of the over-reaches of spending.

Good luck to the graduates.

Climatehoax

Typical liberal, make the tax cuts hurt someone else leave my gravey train alone. Jessi Ventura got at least one thing correct when he was MN gov:
“If you’re smart enough to get to college, you should be smart enough to figure out how to pay for it”

kingman10

well its plain to see hoaxer you certainly weren't smart enough to get to college. Yes Ventura is a well educated politician who should be quoted at every opportunity. These college students you complain about give back more to society in many ways including taxes over their lifetime than non college educated. But don't let the facts get in your way, just stay dumb and quote a dumb past politician, Ventura.

kingman10

yes we have to discourage people from being too educated. Keep dumbing down america so people like Trump can keep getting elected. Its ok though for big business and the top 1% get big tax breaks and loopholes, and off shore accounts. But do away with incentives for a person to better themselves, and therefor better their community and their country. Nope can't have that, keep them in debt up to the eyeballs so the 1% can have the majority of wealth in this country.

canman

Once you’ve decided on further education, use what you should have already learned to figure out how to finance it. The taxpayers shouldn’t be on the hook, especially when so much of the grad school degrees are all fluff with no chance of ever recovering the investment. But they’ve got their masters or PhD.

Slider

Typical constituent, "Don't touch my benefits!!"

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