How To Damage U.S. Science With The Tax Code

If you haven’t heard about this, well, you should, especially if you know any current or prospective graduate students (boldface mine):

For some of us, the American dream includes many years of graduate school and extremely frugal living along the journey to a Ph.D. Traditionally, in a great many fields (such as biology, physics, chemistry, and mathematics), the only way this has been possible is through teaching and/or research assistantships, which grant graduate students with a small stipend (in the ~$20K-$30K/year range) to live off of.

These assistantships also come with a tuition waiver, valued at ~$12K-$50K/year, depending on the public-or-private, in-state-or-out-of-state institution. Currently, these tuition waivers are paid by the college directly to itself, on behalf of the graduate student, and are not counted as taxable income. Under the new GOP tax plan, however, those tuition waivers would be taxed as regular income, making graduate school an unaffordable proposition except for those already independently wealthy….

This is money that, as a student, you never see. It’s paid to the University by the University on your behalf, and you don’t pay taxes on it. So long as you meet the requirements of your assistantship (or fellowship, for example), your tuition is taken care of, and you can attempt to support yourself on your stipend…

Despite earning $23,000/year, you’d pay taxes on $40,520 or $57,914 at a public University, and despite earning $32,500, you’d pay taxes on $81,440 at a private University. For this last figure, this would result in a higher tax rate than anyone else in the nation pays. These numbers represent increases in taxes of $2,628, $6,193, and $10,650, respectively, on these hypothetical graduate students.

(Credit to Claus Wilke for being one of the first people to raise the alarm on this).

There is an issue of sustainability of U.S. science, especially as jobs are leveling off in many disciplines. But this policy would ‘solve’ that possible problem by limiting STEM Ph.D.s to the wealthy. That’s a foolish policy, one that would deny us some of our brightest people, simply because they are unable to afford a Ph.D.

What makes this even more galling is this is being used to fund* a tax break for the wealthiest Americans, including Don Jr., Eric, and Ivanka. This is the scientific infrastructure equivalent of ripping the copper pipes out of the walls, and we would pay for it for years afterwards.

The number for the United States Capitol switchboard is (202) 224-3121. To find out who your representative and senators are, you can click here.

*Yes, it’s stupid we enforce artificial austerity on ourselves as if we were still on the gold standard (and subsidizing graduate student tuition won’t lead to runaway inflation). But as long as the Budget Control Act is the law of the land (it expires in 2021 and shouldn’t be renewed), budgets do have to balance (sort of; it’s complicated).

This entry was posted in Taxes, The War on Science. Bookmark the permalink.

2 Responses to How To Damage U.S. Science With The Tax Code

  1. Felicis says:

    It is already difficult to afford a PhD – I left my program specifically because I was not going to go into debt for 5 more years (I managed to break even until then) so I could scramble for a job somewhere in the US (requiring my wife to move – and, as a teacher, have to redo her certification in a new state, try to get a job, and reset her retirement to whatever that state happened to give its teachers today)…

    Yeah – I left with a master’s degree and only sometimes look back with regret.

  2. Great post on an important topic. This tax plan gets worse and worse with every deduction detail I learn about.

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