$1.5 Trillion GOP Tax Cut Thread

[Dr. Arch]

Something that has surfaced recently:

https://petitions.whitehouse.gov/petition/opposition-taxation-graduate-student-tuition-waivers-and-remissions

The new tax plan aims to tax graduate students' tuition remissions as income, effectively increasing their tax rates anywhere between 100-1,000% on "income" they never see.

The repercussions would be astronomically destructive for higher education and for the upwards mobility of future generations of professionals in the United States.

More info here: http://cgsnet.org/ckfinder/userfiles/files/CGS_Tax_Reform_Scenarios%281%29.pdf


"Example #2: Jose, a doctoral degree student at a public institution had a $14,500 fellowship and was also credited with $9,500 as a tuition/fee waiver.

Under the current law: In 2012, Jose’s tax liability would have been $8,550 and he would have paid $847.50 in federal income tax.

If tuition waivers are considered as taxable income and LLTC is not available: Jose’s tax liability would increase to $18,050, despite the fact he would still take home the same amount of money, and he would have to pay $2,272.50 in federal income tax, or 16% of his fellowship.

Effectively, Jose’s federal income tax would increase by 168%, or $1,425."

-Council of Graduate Schools

[Dr. Arch]

The taxation of tuition remissions for graduate students would make sense if the reason for the remission is that they are performing services, e.g. as teaching assistants, as opposed to it just being a discount ala a scholarship. The amount of tax would be low anyway, if any at all, given that the remission amounts would typically be relatively small.

When you are a grad student, seeing, maybe, $18k a year, and paying over $1k in segregated fees and $1k in taxes, you really don't want to see that double or triple. It would make living unsustainable; it's already hard enough as it is.

[Dr. Arch]

Punishment of education, nothing scares a conservative right-wing populist more than educated people.

There's no difference today. "Conservatives" have no power in the party. There are barely any conservatives left, actually.

[Dr. Arch]

David Frum
✔
@davidfrum
Emerging GOP conventional wisdom: Nothing went wrong last night that raising taxes on the middle class cannot fix.

Great idea... lol

[Dr. Arch]

If a tax cut plan does pass, I'd rather it be this one:

Middle class biggest winners in Senate tax plan, study says

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https://www.politico.com/story/2017/11/12/tax-middle-class-republicans-244815

Does this tax plan still tax graduate students for their tuition remission?

[Dr. Arch]

If a tax cut plan does pass, I'd rather it be this one:

Middle class biggest winners in Senate tax plan, study says

You must be logged in to read this quote.

https://www.politico.com/story/2017/11/12/tax-middle-class-republicans-244815

Does this tax plan still tax graduate students for their tuition remission?

It's a mixed bag. 

Yeah, there's no way I can support this travesty of a bill. Getting taxed for nearly $50k on the $16k you're actually earning is just simply not feasible.

[Dr. Arch]

If a tax cut plan does pass, I'd rather it be this one:

Middle class biggest winners in Senate tax plan, study says

You must be logged in to read this quote.

https://www.politico.com/story/2017/11/12/tax-middle-class-republicans-244815

Does this tax plan still tax graduate students for their tuition remission?

It's a mixed bag. 

Yeah, there's no way I can support this travesty of a bill. Getting taxed for nearly $50k on the $16k you're actually earning is just simply not feasible.

So what you're saying is that a year of grad school isn't actually worth the $30+ sticker price? Regardless of whether it's feasible, there's no denying that it is income. Income is not the same as cash flow. This is far from the most painful example of that. If you get a debt cancelled because the lender figures you'll never pay them back, the debt cancellation is treated as taxable income and Uncle Sam has ways of making you pay that aren't available to private lenders.

Well:

1) No, it's not worth it, but that's not the issue at hand.
2) It is not income. I am not seeing that money, and I don't have the ability to invest it or use it as I wish as if it were actual income.
3) This is not a debt cancellation; this is a waving of charging you something (100% discount). By your logic, states should start taxing coupon sales and the like (Buy 1, Get 1 Free [+taxes on what you didn't pay]). Got a discount? Pay taxes on the full price even though the price you're paying is lower. It's ridiculous.

[Dr. Arch]

1) No, it's not worth it, but that's not the issue at hand.
2) It is not income. I am not seeing that money, and I don't have the ability to invest it or use it as I wish as if it were actual income.
3) This is not a debt cancellation; this is a waving of charging you something (100% discount). By your logic, states should start taxing coupon sales and the like (Buy 1, Get 1 Free [+taxes on what you didn't pay]). Got a discount? Pay taxes on the full price even though the price you're paying is lower. It's ridiculous.

1) Actually that is exactly the issue at hand.
2) I repeat, since you clear ignored the point, income is not synonymous with cash flow. You've chosen a job which includes payment of your tuition as part of the pay package.
3) I never said it was the same as debt cancellation. I used that as an example of income that doesn't involve cash flow. What it is, is an employee benefit. Some benefits get taxed, some don't. This change involves changing it from tax-free to taxable. Incidentally, unless they're getting rid of the entire employer educational benefit provision, the first $5,250 of assistance each year will still be tax-free, just as it would be if you were getting tuition assistance from any other employer. For that matter, with a little creative accounting, they might be able to split your job among multiple employers, say by having you hired by the professor you're assisting for each course/field of research, so as to get that $5,250 multiple times,  assuming you assist more than one professor.

1) Costs of almost everything in this country are inflated.
2) Fine, but I'll let you know that the contract states that the tuition remission is part of the benefits, not a supplementary payment to my income, which is already stupid low.
3) Not feasible. Tuition remission is calculated differently from tuition. In this university, the hiring body pays the university $8,000 to have the tuition waived for a year. The university is actually charging itself less. If you start having to break it down, there will not be enough resources to maintain the graduate student population.

I'm already working about 60%, while being paid for 40%. On top of that, I pay segregated fees equal to about 8% of my income ($1,300 a year at this point). On top of that, I pay taxes on the income I receive. And now you want to tax me as if I were earning $50,000? I don't have the time to work another job to cover for that, so you're forcing a workforce to go into debt while working. That's really screwed up. This country does not value the resources that come with having an educated workforce. In the long run, we will lose to other countries that do. That's why the U.S. has been falling behind on everything but weapons. Oh, the irony.

[Dr. Arch]

If a tax cut plan does pass, I'd rather it be this one:

Middle class biggest winners in Senate tax plan, study says

You must be logged in to read this quote.

https://www.politico.com/story/2017/11/12/tax-middle-class-republicans-244815

Does this tax plan still tax graduate students for their tuition remission?

It's a mixed bag.  

Yeah, there's no way I can support this travesty of a bill. Getting taxed for nearly $50k on the $16k you're actually earning is just simply not feasible.

So what you're saying is that a year of grad school isn't actually worth the $30+ sticker price? Regardless of whether it's feasible, there's no denying that it is income. Income is not the same as cash flow. This is far from the most painful example of that. If you get a debt cancelled because the lender figures you'll never pay them back, the debt cancellation is treated as taxable income and Uncle Sam has ways of making you pay that aren't available to private lenders.

Well:

1) No, it's not worth it, but that's not the issue at hand.
2) It is not income. I am not seeing that money, and I don't have the ability to invest it or use it as I wish as if it were actual income.
3) This is not a debt cancellation; this is a waving of charging you something (100% discount). By your logic, states should start taxing coupon sales and the like (Buy 1, Get 1 Free [+taxes on what you didn't pay]). Got a discount? Pay taxes on the full price even though the price you're paying is lower. It's ridiculous.

Properly, this is how taxes should work: discounts, sales and rebates (whether a holiday sale at a retailer or a discount you receive as part of your compensation for employment) should be taxed. Otherwise, you incentivize compensating people with discounts, sales and rebates over income. The problem is that it is sometimes very difficult to figure out exactly how much a discount, sale or rebated item should be taxed or to assign it a value, especially when a large portion of such products are offered at a discount price. But the theory of the bill is absolutely 100% correct.

The bill is purposefully targeting one population. If they're going to start doing this, they have to do it across the board if they're being honest about it. As it is, it's about punishing a group of people they don't like, who are already incredibly disadvantaged fiscally because of how out of control tuition is.

Whether we should spend more on education (and I agree we should) is a separate issue as to whether we do the spending via the tax code. In general, we should get rid of tax expenditures.

Besides, I've seen this argument before. It used to be that even the cash you were getting was tax-free. Taxing it would destroy higher education said the higher education lobbyists. Doesn't look too destroyed, does it?

Well, you tell me, based on the information I've given you, how am I supposed to live with that kind of a tax burden? I'm all for taxing appropriately and for the right purposes, but this is abuse.

An institution can survive fiscal blows due to sheer size and budget, but an individual and overworked graduate student will not. Institutions depend on grad students to keep them running.

[Dr. Arch]

You're right.  What we argue here will not affect the outcome of the bill.  But it is a good idea to recognize when someone is distressed about something and acknowledge that even if you disagree and make an argument to the contrary.

That is just basic human decency, which does, in fact, matter here.

I'll rely on Arch to say that they found my post hurtful or offensive rather than randoms jumping in to make hostile accusations for the sake of fighting about it.

I don't think it was hurtful or offensive, but I found it rather insensitive, given that you're talking to a member who's directly affected by this.

In any case, the intent was not to engage in a dialogue devoid of context, but rather contextualize this change within the current paradigm of the status quo in the United States. If it applies to one, it should apply to all. This tax code change is a political hit on a currently-impoverished group of future professionals that this country will rely on.

[Dr. Arch]

You're right.  What we argue here will not affect the outcome of the bill.  But it is a good idea to recognize when someone is distressed about something and acknowledge that even if you disagree and make an argument to the contrary.

That is just basic human decency, which does, in fact, matter here.

I'll rely on Arch to say that they found my post hurtful or offensive rather than randoms jumping in to make hostile accusations for the sake of fighting about it.

I don't think it was hurtful or offensive, but I found it rather insensitive, given that you're talking to a member who's directly affected by this.

In any case, the intent was not to engage in a dialogue devoid of context, but rather contextualize this change within the current paradigm of the status quo in the United States. If it applies to one, it should apply to all. This tax code change is a political hit on a currently-impoverished group of future professionals that this country will rely on.

Fair enough, and I agree that equal treatment is appropriate. Although my understanding is that what is proposed to be eliminated is a special exception for education, and other types of discounts provided by employers as compensation are already taxed as income.

http://idahobusinessreview.com/2012/09/13/talking-tax-employee-discounts-can-be-taxable-income/

Would this really count as a "discount"? It's a waiver, rather than a reduction.

[Dr. Arch]

Not to say that I told you so, but I told you so.

[Dr. Arch]

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Pretty good news, but Johnson is a hack, so I'm sure he'll find a way to support it in the end. He did the same song and dance with skinny repeal.

[Dr. Arch]

Republicans might just fail at this too.


lol

[Dr. Arch]

RIP Graduate Students, Research Programs, and Higher Education/Professionalization institutions in this country if this passes.

[Dr. Arch]

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https://twitter.com/christinawilkie/status/935637329062055936

Kennedy certainly has a way with words:

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Then he better drink it in open congress as he hackishly votes for it and screws over his constituents.

[Dr. Arch]

And the monumentally catastrophic change in the tax code for graduate students is still in there, correct?

[Dr. Arch]

And the monumentally catastrophic change in the tax code for graduate students is still in there, correct?

Of course

Sigh...

[Dr. Arch]

And the monumentally catastrophic change in the tax code for graduate students is still in there, correct?

Of course

Sigh...

Do explain? I missed this.

They're making a change to the tax code so that tuition remission is taxed as income for graduate students. That means that students making around $16k a year will have to pay taxes for $40k or more. Not only does that make them jump tax brackets, it also taxes them for a ridiculous amount of their already extremely low actual income.

[Dr. Arch]

I thought the Senate version of the bill didn't have the tuition remission part.

You're right on this, but we'll see what happens in the reconciliation process.

https://www.snopes.com/tax-plan-graduate-students/

[Dr. Arch]

Rubio and lee want corp cut to 22% not 20% in order to pay for more generous child credits

Should go the opposite way and reduce the corporate rate lower and axe more child credits.

Tax children on their allowances while they're at it. That's the Republican way.

[Dr. Arch]

Republicans are suck a pathetic bunch

I love how Trump pwned Flake and Corker and exposed them as his b!tches tho. Maybe now stupid Democrats will stop praising them for doing the obvious and calling an idiot an idiot?

Holy sh**t

[Dr. Arch]

I was joking earlier about them still writing the bill with typos and mistakes in it and look:

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What a disaster

[Dr. Arch]

If I understood correctly, the House bill could really raise taxes on people like me on graduation tuition waivers at private universities by taxing the waiver as income.  Many of us have very little money and loads of debt, and they want to act like we are high rollers. I should be out by the time this would go into effect, and take limited courses at the moment, but man...

I don't know the details, so I would love if someone could explain this isn't as bad as it sounds.

No, it is just as bad as it sounds.

[Dr. Arch]

If I understood correctly, the House bill could really raise taxes on people like me on graduation tuition waivers at private universities by taxing the waiver as income.  Many of us have very little money and loads of debt, and they want to act like we are high rollers. I should be out by the time this would go into effect, and take limited courses at the moment, but man...

I don't know the details, so I would love if someone could explain this isn't as bad as it sounds.

No, it is just as bad as it sounds.

PS- arch, sorry I was being a turd to you earlier this month. I was going through some stuff and was taking my frustration out on this board.

No problem. Apology accepted