It is make or break week for tax reform. Analysts believe the Senate will be voting early this week on their version of tax reform. Apart from ignoring public opinion polls on corporate tax rates (see Gallup polling), the Senate, like the house, plans to remove Section 117 (d) from the tax code. This section states “Gross income shall not include any qualified tuition reduction.” If this section is removed, graduate students who receive a tuition waiver will have to add that tuition waiver as their income. As a result, graduate students will see a massive hike in their federal income taxes, making it much more difficult for students from working class families to enroll in graduate programs.
Included are examples of the increase in federal income taxes local graduate students will see if this version of tax reform is passed. While the new federal income taxes may seem small to come, take into consideration the hike, doubling, tripling, and even quadrupling the amount paid. Note the proportion they are paying in relation to their stipend, which for many is their entire income for the years they spend in graduate school. Do research into public opinion polls on who Americans want to tax more or less. Finally, contact your Senators. Tell them science and education is for everyone, not just the affluent!
Disclaimer: The numbers included are only federal income taxes. These numbers do not take into consideration FICA, state, or local taxes. For any questions or issues you may have with the numbers included in this article, feel free to contact our Public Policy Manager Arie Glavan at arie@milwaukeescience.org.