Republican Party’s tax plan could raise taxes for graduate students

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The Republican Party’s newest tax bill touts big breaks for the wealthy but could result in an increased burden on graduate students.

On Nov. 4, UC Berkeley physics graduate student Vetri Velan took to Facebook to post about the effects of the Republicans’ new Tax Cuts and Jobs Act, or TCJA, on graduate students at public and private universities. By analyzing cost of attendance data from UC Berkeley and MIT, Velan determined that public school graduate students would see a tax increase of about 30 to 60 percent, while private school graduate students would see an increase of approximately 240 percent.

As the law currently stands, doctoral candidates can receive a tuition waiver, in addition to health insurance and salary stipends, from the university they attend. While the salary stipend is considered taxable income, the tuition waiver is not.

If the TCJA were to pass, however, graduate students would be responsible for paying federal income taxes on their waived tuition.

“If this passes, the university has a choice, (but) either choice is bad,” Velan said. “They can either keep stipends the same, or they can increase the stipend, but that would cause them to hire fewer Ph.D. students, which would result in a decrease in the quality of education and research.”

UC Berkeley Graduate Assembly President Kena Hazelwood-Carter said the TCJA’s revised education provisions exacerbate the issue of basic needs and security for graduate students, stating that increased taxes would “intensify an already vulnerable situation. By raising taxes, Hazelwood-Carter said, students would be less likely to attend UC Berkeley.

“Berkeley (has) such a high living cost, (and) it’s already something where a lot of people really struggle to find a way,” Hazelwood-Carter said. “When looking at the package you’re being offered to come to Berkeley or go to (University of Wisconsin)-Madison, (it’s) the same dollar amount, but it goes a lot farther at Wisconsin.”

According to UC Berkeley School of Law professor Eric Rakowski, however, the bill is not likely to pass in its current state. Reconciliation efforts — discussion between the House and Senate chambers to come to a consensus on the contents of the bill — would probably change the TCJA’s contents, Rakowski said.

“I’d say no, (protecting educational tenets is) not going to be a high priority,” Rakowski said. “(There are) other things that are going to get the attention. I don’t think that students have a sufficiently powerful lobby.”

Indivisible Berkeley, a nonprofit activist organization focused on resisting President Donald Trump’s administration’s agendas, hung posters above the Interstate 80 freeway on Thursday emblazoned with “#TrumpTaxScam.” According to UC Berkeley graduate student Sam Kohn, a member of Indivisible Berkeley, the group is confident that their efforts to shut down the TCJA will be successful.

“We helped … take down the repeal of Obamacare — we fully expect that to happen again,” Kohn said. “It’s nerve-wracking; there’s a lot of money that’s up for grabs, so we’re really putting our all into it.”

Revati Thatte is the lead higher education reporter. Contact her at [email protected] and follow her on Twitter at @revati_thatte.

Correction(s):
Due to misinformation from a source, a previous version of this article stated that UC Berkeley has the highest number of graduate students in the UC system. In fact, UCLA has the highest number of graduate students in the UC.