Grad school is a weird limbo between real school and a real job: you get grades, sometimes you go to class, but you also spend most of your time working in a lab for which you are paid a stipend. This stipend ranges from $25,000-$39,000 per year, mostly depending on the location of the school (e.g. grad students in New York generally get paid more than grad students in Alabama due to differences in cost of living). This stipend currently falls into the category of “taxable income”, which seems fair to me, since it is our equivalent of income. So tax-wise, the job part is fine and easy.
The school part is where it gets tricky. Given that a year of tuition costs as much as a graduate student stipend or more, most PhD programs award graduate students tuition waivers. Labs and students largely operate with their own financial support from grants and fellowships, while universities cover basic facilities costs and other overhead, which are a relatively small portion of total costs. This means that the value of these waivers “awarded” to graduate students is directed toward the university more than any student. In other words, as a student and lab member, I do not consider this tuition waiver personal income; I don’t really get to use this money.
Despite this, the GOP tax plan would force graduate students everywhere to classify tuition waivers as taxable income, effectively tripling my tax bill. The current bill gets rid of tax waivers on scholarships, meaning that even though I make $37,000 per year, I’m going to get taxed like I make $90,000. Which means I would be paying about $27,000 per year in taxes. Which means I would only have $10,000 to live on in New York City for a year. Which means I would owe 73% of my usable income in taxes, a higher percentage than any millionaire or billionaire in the United States. I don’t need to tell you that this would be impossible without independent wealth or a second job (something a great number of grants specifically prohibit me from having).
This is why this tax plan is so galling to me and graduate students everywhere; the House GOP is either ignorant of or ambivalent about what it would mean to training scientists everywhere. Tax-exempt tuition waivers are maybe the only thing that makes graduate school accessible to people from all backgrounds, and this plan shifts the tax burden off of the most financially secure people in the country onto vulnerable students. This tax plan would cripple graduate education across the United States, and would slash the hopes of would-be scientists who aren’t independently wealthy or willing to take out tens of thousands of dollars in loans (likely on top of undergraduate loans). This could have huge ripple effects on United States progress in STEM fields for generations, undermining our competitiveness in science and technology for years to come.