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Report Claims GOP Tax Plan is Bad for Higher Education

Report Claims GOP Tax Plan is Bad for Higher Education

“there might also be an ideological force at work here”

For many Americans, this will be seen as a feature not a bug.

Bloomberg reports:

Republican Tax Plan for Colleges Is a Self-Inflicted Wound

The tax reform plan now making its way through Congress has a number of measures that would hurt higher education in the U.S. The most worrying feature is that it would tax tuition waivers for graduate students as income, making it much more expensive for most students to get a Ph.D. It would also end tax deductibility for student-loan interest payments, dramatically increasing the already-crushing burden of debt for many former students, and deterring many young people from going to college in the first place.

This is a very bad idea. The U.S. university system is one of the country’s most important remaining economic advantages. Even as manufacturing industries have moved to China, the U.S. has retained its dominance in higher education. The research and technology output of American universities, and the skilled postgraduate workers they produce, are an important anchor keeping knowledge industries — Silicon Valley, the pharmaceutical industry and the oil services industry, to name just three — clustered in the country, instead of fleeing to places with lower labor costs. Degrade higher education, and the U.S. will become a much less attractive place for cutting-edge industries, and less important to the global economy.

Why are Republican legislators setting the country on such a self-destructive course? It might simply be an oversight — a result of congressional aides looking for ways to pay for tax cuts. But there might also be an ideological force at work here.


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Higher education is killing itself.

They can save money and funnel it into grad program losses by cutting out the administrative bloat bubble that they have blown up for years and years.

There’s also a complaint that charities and non-profits in general will be hurt because the increase in the standard deduction makes contributions to these tax-deductible for fewer taxpayers.

But if “tax reform” means “simplify the tax code” then there must be fewer deductions (although it’s to be expected that everyone who benefits from a deduction to be eliminated will bellow their outrage to the heavens).

In any case, if universities are concerned about this, the schools could always replace those tuition wavers with cash, couldn’t they?

Another thing which the schools could do is drop the cost of the tuition for grad students in these positions to zero as a part of the perks of the job. The problem with this for the professors is they would not be able cite the widely overinflated tuition cost when they write ups the grants, claiming that they have to cover the cost of the students. On top of that, the school does not get to pile on the “overhead” cost on top of the already inflated grant amount.