So on a practical basis, how do you propose these added taxes get paid? How should @ClassicRockerDad’s kid pay her additional $8000 tax bill on a $30K salary (likeiy with a state tax bill on top of that)?
Find a dying decamillionaire to leave that amount of money to her in his/her will, out of the amount that is no longer needed to pay estate tax?
imurhucklebury:
You are still conflating undergraduate and graduate education.
There are current graduate students who already took out the maximum student loans allowed for undergraduate education, and whose parents already took a second mortgage to pay the rest of the undergraduate tuition. They are the families that “pay $45 to 70K per year when they don’t quality for FA” for an undergraduate education. They did that. Now it is time for graduate school. The family has no more money for higher ed. They have already been disadvantaged by the system that upsets you. Currently this student can get a “free” PhD. Under the proposed plan, this student probably doesn’t get a PhD.
In recent decades students haven’t paid for PhDs in the same way they have for medical, law, business school. Generally I understand that is because PhD salaries are too low to make borrowing money for PhD programs feasible for most people. Usually they don’t make the salaries of doctors, lawyers, businessmen. You can find a few who do. They usually teach in the medical, law, business schools.
If you paid graduate students a salary that covered tuition plus the stipend, at many places you would be paying them more than most entry level faculty positions at that institution. You would be paying them more than adjuncts paid by the course.
Right now a PhD program is a great deal for families like yours. It would allow your child a “free” advanced degree. That is probably not going to be the case for long. Then undergraduate education and graduate education will both be prohibitively expensive for all but the upper classes. If your kid wants a PhD, you will have to pay for it out of pocket after paying for the BA/BS degree.
If you think your kid may want a PhD some day, you are advocating for taxes that will disadvantage your family. And I gather from some comments, posters think this will apply to those “free” MD/PhD programs as well.
@intparent , the corporate tax does not pay for anything. You do. Every product and service you and everyone else purchases is more expensive because of the additional costs in the supply chain. Reducing or eliminating corporate taxes will lower prices, make exports more competitively priced and hence larger, result in more jobs, making your Ph.D. student more employable and incentivizing more corporate sponsorship of STEM fields.
@alh is correct ; masters degrees are often more expensive than doctoral degrees. Look at the costs of an MBA vs a DBA, for example. An upper tier MBA program total costs $90-$150K in tuition, while a DBA at the same schools is half or less of that price (and most students pay nothing due to stipends)
I am emphasizing this because most people either never realized this, or have forgotten. In fact, the corporate tax is simply an excellent sleight of hand, making it appear that your personal taxes are lower when instead a portion of it is embedded in the price of products you purchase. And then sales tax is added on top of that.
off topic
…
imurhucklebury:
You have written a few times your child won’t qualify for tuition waivers and I’m not sure what you mean by that. Your child may not qualify for need based aid, but may qualify for merit aid which is awarded regardless of the student’s financial circumstances. For merit awards, it doesn’t matter if the family’s annual income is $20,000 or $200,000. Many families in your situation look for merit aid, not tied to financial need, to help with college costs.
For example, there is a full tuition scholarship at Alabama for students who do well on the PSAT, This is available to families like yours. It doesn’t matter how much money you have. It is based just on PSAT (if I understand correctly?) There are numerous threads about all sorts of merit scholarships, all over the country, and many knowledgeable posters willing to help you if you want to explore this option for helping with college costs.
You are a new poster and I sincerely apologize if I’m telling you something you already know. I’m just trying to be helpful.
Can’t argue with some posters without discussing politics. I’ll stick to the problems facing graduate students under this plan, not some political argument.
Someone sent me this article
https://www.wired.com/story/grad-students-are-freaking-out-about-the-gops-tax-plan-they-should-be/
I work on DOD stuff and we need PhDs. Why would a US citizen get one under these conditions. This is really terrible for American research and pretty short sighted.
Penny wise pound foolish. Nothing ever changes.
I have a D who is in her first year of a biomedical sciences PhD program. The proposed additional taxes would be a huge financial burden for her, and we are not in a position to help her pay the extra $. We have 2 other kids who are currently undergraduate college students.
PhD program D is 23 years old (not married to a sugar daddy spouse who can supplement cost of grad school), and her annual stipend is enough to pay her 1/2 of rent in a shared apartment,and along with other household expenses, a cheap used car, taxes, etc, without much to spare. She has a very tight budget already. She is in another state and cannot commute from our home.
Sure the corporate tax comes out of corporate profits, some of which comes out of our pockets. Som comes from the rest of the world, too. But it isn’t like corporations are going to lower our prices if their taxes are lowered. Haha. Silly thought. They aren’t going to increase wages for average workers, either. They will increase the already obscene salaries they pay executives, stash cash overseas to dodge any remaining taxes, possibly pay dividends or do stock buybacks (which again helps wealthy people more than anyone else), and pay even more to influence laws in their favor via contributions to candidates and PACs.
They aren’t going to pay into the education system, clean up environmental messes that they help make, fund our highways or food safety, fund climate change research, research orphan drugs or find vaccine research that might not be profitable but could ultimately save many lives. But they should, because corporations benefit from all of those things.
I own a small corporation. And I pay federal taxes via passthru, and my state also has a corporate tax my corporation pays. And so does my city. You know what? I’m good with that. I’m okay with putting some of my corporate profit toward our local homeless & transit problems. I’m okay with subsidizing entry to state parks and making it feasible for students of all economic strata able to attend grad school with funding.
Large corporations are way, way too powerful now. The balance has tipped too far in their direction. They’ve figured out how to game the system too well, and have far too large a voice and influence in our politics. I work with quite a few corporations in my business, and get a good look at the inside. And most are pretty rotten ethically. There is little loyalty to their employees. community, or country. Paying a corporate tax for the common good is the least they can do.
thanks for the link, CRDad. The analysis completed by Berkeley supports what I’ve been sayin’ all along:
https://drive.google.com/file/d/1e3oIk8AO9F_UL98z5cieKha1V5e9azzB/view
Do you believe that corporations are immune from competition?
Back on topic, did anyone post that the endowment tax thing backed off schools with 100K per student and went up to 250K per student endowments?
Some on this thread have argued that a tuition waiver is a tangible benefit that should be taxed. I have stated my disagreement. I know that I might be provoking the blowback effect, but I’ll try one more analogy.
Suppose that we have a new grad who gets a job in the commercial world. Further suppose that the new grad’s cash compensation is 25K. The job is very technical and requires extensive on-the-job training before the new grad is productive enough to contribute to the firm’s revenue generation capabilities. Further suppose this on-the-job training costs the firm about 100K per year.
Why is this new grad’s taxable income not 125K?
Surely the new grad’s marketability and increased skillset is a tangible benefit.
I would hope that your school applies the tuition waiver for spring to your student account in December 2017. Schools that don’t do this are grossly negligent.
The root of this entire problem is special treatment for certain groups. All education expenses should be tax deductible, or none of it should, and everyone should receive a lower overall tax rate (my preference). If a business pays for an MBA or a PhD for one it its employees to enhance their value to the firm, the tuition is fully deductible to the firm and not considered income to the employee. But if a university pays one of its apprentices (TA, RA) via a tuition waiver it is proposed to be income to the student. The government is effectively clawing money out of non-profit research universities (same with the tax on endowments). This thread is just outlining that paradox.
As @intparent says, he would prefer to have large corporations pay tax too. But large companies like Apple set up their corporate structures to minimize their taxes and pay less than dynamic small/midsized domestic ones that employ so many Ph.D students in market shattering research. Paying less tax legally is their fiduciary duty to their shareholders. It also gives steepens the hill for smaller firms who are the potential competition of the large ones, and a huge barrier. High domestic business taxes limit the supply of small, dynamic, IP centric firms which is where many young doctoral graduates should be working (or starting).
I’m a “she”. 
Some would say that’s the issue with our entire tax system. Carrots and sticks to encourage saving for retirement, buying a home, educating your children, locating your business in a particular city, whatever.
Doubt that goes away.
One of the biggest ones is the special lower rate for long term capital gains, with a 10 year impact of $1.2 trillion. For some reason, that has not been targeted in the current bills, unlike other big (but slightly smaller) ones that it targets like home mortgage interest deduction and state and local tax deduction.
Well, if you want to give someone influence in politics, tax him. If you worry that the wealthy have too much say, it is because they pay too much of the bill. A flat tax would equalize that power gap.
Or you could go the other way, and engineer the scales so that 49% subsidize 51% and then you could win many elections.
One of the problems with “reforming” an unjust, progressive tax system is that parasites of all kinds now make their living with the status quo. Even the slightest changes are met with wailing and gnashing of teeth. Unless, of course, the idea is to tax an outnumbered group of taxpayers disproportionately.
People decry the runaway inflation in education and healthcare, both in universal demand yet highly subsidized. Subsidies drive up prices. Preferential tax breaks are subsidies. I have no problem with leveling the playing field for everyone.
An unspoken yet obvious problem with our tax system is that too few people pay taxes. The proposed reforms unfortunately don’t do much to increase the tax base but any normalization of rates is a good thing, especially when the rates are also reduced.