If you just wanted a more progressive taxation scheme, you could increase the standard deduction and personal exemption, cut the rates in the lower tax brackets, or cut payroll taxes. Even if you want a more progressive tax system, it still makes zero sense to give PhD RAs/TAs special treatment. I think your characterization of PhD students as poor is misleading. They may be poor at that particular point in their lives, but many were raised in very wealthy families and will have upper middle class or better careers when they graduate.
I think there are trade offs in any tax system. Supporting education to the fullest helps to create a more vibrant economy and the need for less h1b visas . Also how much money do you think will actually be raised by this ? Colleges will give scholarships and the amount of any earned income will be very low. So the current proposal is to tax the PhD student and let the 5000 top estates of multimillionaires and billionaires walk away tax free. Wow how backwards is that!!!
The average length of a PhD in my kid’s area of study is over 6 years. She isn’t going to get rich from it, either. It WILL become a path just for rich kids if their taxes go up that by 200% or more.
If we want college to be more affordable for undergrads, larger tuition tax credits would be a more effective method. If we want more cancer research, give more funding to the National Cancer Institute. No matter what your policy goals, giving PhD students special tax treatment is inefficient.
Interestingly, my D’s grad program actually pays certain TA’s on a W2: a lucky few in the terminal MA/MS can earn cash – not tuition remission – for being a TA; in the doctoral program, after completing the “required” xx TA courses as part of the PhD program, they will be paid real taxable money for any other class that they volunteer to TA.
Besides the tax issue, personally I think that the idea of forced servitude for grad students is a moral/ethical issue than it is taxable income or not.
@roethlisburger -Both of these points seem very shaky. I do not believe at all that many PhD students were raised in “very wealthy families”. And I would certainly not put most PhD holders in the upper middle class (200K+)
Isn’t whatever is taxed on PhD student’s income peanuts? What do they make? Like 20-30K if even that? Why shouldn’t they get certain treatments since they’re still students and don’t necessarily work in “revenue generation” instead focusing on research?
TA’s are certainly not involved in research.
But the research question is a good one: PhD students work on their own research – which probably should not be taxable – but they also work in campus labs and help their colleagues on their research. Post-docs are doing research and that is taxable income. Where do you draw a line?
“Point is if people are poor, they get FA. So Rich and poor have college covered. Middle class struggles to pay and private universities keep raising their astronomical tuition rates.”
Students from poor families only get massive FA if they are one of the lucky few who get accepted at the very top colleges and universities which can afford to cover a significant portion of their financial aid.
Most Lower SES students need student loans along with parent loans. Many have parents who are unable to even take these loans. Many of these students eventually have to drop out because they can’t take out more loans and they are left with a mountain of debt and no degree.
@bluebayou said:
What are you talking about? My Ph.D. candidate is heavily involved in research and has been required to be a TA for most of that time.
All doctoral candidates are conducting research, by definition. Much of that is their own research, but other research is to collaborate and assist other doctoral students and faculty in their research. But they clearly do not need to TA to conduct research. (And being a TA can get in the way of research, unless the research is on those undergrads in the class being TA’ed.)
In other words, does the TA job description of your PhD candidate require different research (than above) as part of the TA duties?
Have they gotten rid of the tax credits were people can get more of a tax refund than they actually paid in taxes? I’d like to see that go before taxes on students scholarships or tuition waivers. These young people don’t have the cash income to pay the taxes imposed on them and if they don’t have parents that can/will pay the taxes for them what are they to do???
^^^^You weren’t clear that you were saying that TAs are not doing research specific to the classes they are teaching/or in conjunction with their teaching duties in that class. You just made the general statement “TAs are not doing research.”
My D hated being a TA, because it certainly took away from her time she’d rather spend on her other requirements. But she was required to do it in exchange for her tuition forgiveness. Isn’t that the case for most Ph.D. candidates?
All these people perfectly happy to see Ph.D. students (who are barely making it on 20K a year while working their butts off, researching, writing/publishing, and taking other classes) pay additional taxes on their pittance of a lifestyle in order to balance out tax relief to corporations and uber wealthy just blow my mind. It also seems so short sighted.
^^You are correct, I should have said something to the effect, ‘the job of TA does not require research’, which is really the focus of the discussion and the proposed tax: tuition remission for working as a TA. In other words, making the income of a TA job subject to income tax, regardless of whether that ‘income’ is given in cold cash or tuition remission.
The issue I see with it is that most simply won’t have the money. Tuition is anywhere from 25K (if you attend your instate public) to 55K (if you attend a private university). TA’s make 20-30K.
How will they pay taxes meant for a 45-55Kincome off a 25K salary? If they’re at a private university, how will they pay taxes meant for an 80K income with that 25K?
I can’t see how they’ll be able to.
For some, parents will pay (and this will turn into a tax on middle class parents).
As for others…??
And I don’t think calling the fee waiver “scholarship” will work, it seems too easy a loophole, or they’ll fix it quickly and make all scholarships taxable if they’re determined to get that money.
Taxes on SOME private universities’ endowment makes sense. Not for public universities (whose budget have been cut left and right) and not for the “regular” private universities though. It’d totally destabilize higher education if “regular” private universities and public universities were treated like HYPSM - however, for these, not being taxed could be in exchange of providing better/more scholarships to students (ie., incentivize financial aid improvements).
I’m confused. My kid - undergrad - pays taxes every year on her scholarship(s). Once we go past tuition/books into R&B, that is.
Yup, definitely not getting help from parents here. And then if we get “help” for our taxes, would that not count as income, too?
And then it makes me wonder- would this then become income for things like insurance?
Scholarships for undergrad tuition are tax free. Scholarships that cover room and board, and optional equipment, is generally taxable.
From the IRS website:
@bluebayou thank you. What I don’t understand is why a full ride (which generally means room and board) would be tax-free for a grad student TA when it is not for an undergrad?
my mistake if I typed that earlier. “Full ride” has many uses here on cc, some of which are just full tuition scholarship, (and no R&B).
Of course, the rules for grad/professional students are similar: merit scholly/fellowship for tuition is tax free. Addiitonal ‘free’ money for R&B is taxable.
Most PhD students pay their room & board out of the stipend they are paid (which is now and will continue to be W-2 taxable income). It is the tuition remission/waiver that hasn’t been taxable, but would be now. Like… $45,000 tuition at a school like MIT, for example.