The U.S. House of Representatives passed the Republican Party’s latest tax bill, which could increase financial burden on graduate students, Thursday.
As the law currently stands, tuition waivers that graduate students receive from their universities are not considered taxable income. Under the House’s version of the Tax Cuts and Jobs Act, or TCJA, tuition waivers would be considered taxable income for which graduate students would be required to pay.
“Tax reform should not be borne on the backs of our hardworking graduate students,” said UC President Janet Napolitano in a statement. “They are vital to the university community and society at large. … They are our nation’s future and deserve congressional support — not a tax hike.”
The UC system initiated an advocacy campaign last week to facilitate open communication between the UC community and members of Congress. The campaign will urge legislators to object to the TCJA, which would result in higher education becoming “more expensive and less accessible,” according to UC Office of the President spokesperson Stephanie Beechem.
Eric Rakowski, a professor at UC Berkeley School of Law, explained the rationale for supporters’ consideration of the TCJA as a sensible tax policy. Rakowski stated that while the bill may have a certain degree of consequence, removing special provisions would make the treatment of graduate students — who are employees of the university — consistent with that of employees of any other employer who receive in-kind benefits.
Kena Hazelwood-Carter, president of the Graduate Assembly, or GA, described the TCJA as “disheartening,” remarking on its impacts on the affordability of higher education.
“(Should the bill pass), we will see a group of people traditionally more white and affluent become even more white and affluent,” Hazelwood-Carter said. “There will be major ramifications not only for (the) campus, but for the country.”
The GA has been increasing accessibility to resources and creating spaces for people to learn more about the TCJA. Hazelwood-Carter cited the Nov. 29 walkout on Sproul Plaza as an example of graduate student opposition to the TCJA.
Rakowski emphasized that the full effect of this tax bill on graduate students is still unknown. He added that increasing the stipend for graduate student instructors, or GSIs, and graduate student researchers, or GSRs, could offset increased taxes, but if the House tax bill prevails and nothing is changed, the students would suffer from inaction.
Rakowski added that lowering tuition for graduate students is not likely, as high nominal tuition and increased tuition waivers allow greater access to federal grants.
In order to assess the negative effects of the tax bill, Vetri Velan, a third-year physics doctoral student, and Katherine Shield, a first-year graduate student in nuclear engineering, developed a calculator that estimates the amount by which taxes would be raised for graduate students under the House version of the TCJA.
Use the calculator UC Berkeley graduate students developed here.
According to Velan, GSIs could see a $1,400 — almost 60 percent — increase in taxes, while GSRs could see a $1,100 — or 30 percent — increase in taxes. Velan added that the tax bill will impact undergraduates by discouraging them from attending graduate school.
The UC is working diligently to inform legislators about how debilitating the House version of the tax bill would be for higher education in the United States, according to Fiona Doyle, dean of the Berkeley Graduate Division.
“Damaging taxation is being proposed for low-income individuals, while high tax cuts are being made (for) the wealthy,” Doyle said. “It is obscene.”
Hazelwood-Carter mentioned that the tax bill reflects what we hold important in society and advocated the recognition of the value of the university.
“At the core of this bill is what do we value as a society?” Hazelwood-Carter said. “Do we value knowledge, education and empirical understanding of the world around us? Or are we more swayed by dogma?”