Tax Cuts and Jobs Act may increase grad student taxes by $10,000 or more

Graduate Student Council organizes phone banks against bill

The Tax Cuts and Jobs Act of 2017, set to go before the House of Representatives for a floor vote, has caused widespread concern on campus, specifically regarding Section 1204, which may add previously excluded qualified tuition reductions to graduate students’ taxable income. According to President L. Rafael Reif and the Graduate Student Council, this could increase the taxes of each of MIT’s nearly 7,000 graduate students’ by $10,000 or more.

Reif released a statement to the MIT community by email yesterday, writing, “MIT is actively following developments in DC and striving to achieve a better outcome” and commended graduate student leaders in arguing against the provision.

The GSC wrote in a statement published on its website, “The resulting annual income tax of at least $13,000 would account for more than one-third of the average $37,000 annual stipend that MIT graduate students receive, leaving them with less than $24,000 to live on.” It urged members of the House of Representatives to oppose the provisions.

The GSC has hosted two “Call your Congressman” events on campus. The first was in coordination with the National Association of Graduate-Professional Students and resulted in a total of 268 calls to 99 offices in 23 states.

However, Peter Su G, the GSC external affairs chair, said that this was merely the “first step to provide an avenue to [graduate students] express how the bill will impact them.” The GSC plans to do further work with the MIT administration “to coordinate a bigger response,” including reaching out more to students and the broader public with the MIT D.C. office.

The MIT Democrats executive board took an even stronger stance, calling the Tax Cuts and Jobs Act “abhorrent.” The board wrote in an email to The Tech, “The idea that graduate students, who already often work grueling hours at effectively below minimum wage, should be liable for some $17,000 of taxes on $36,000 of income is not just ludicrous, it is reprehensible.”

The MIT Democrats plan to work with the GSC “to mobilize opposition to this bill.” Many of them have already participated in phone banking, letter-writing, and awareness-raising campaigns, according to its statement. The MIT College Republicans executive board did not respond to The Tech’s request for comment.

However, some graduate students are less concerned. One student, who asked to remain anonymous, called the general response to the act a “collective hysteria.”

He believed that because the bill only repealed the section related to qualified tuition reductions, but not qualified scholarships, it would not impact the graduate students that received tuition waivers. The student also speculated that the Senate version of the bill, which does not include the section in question, will likely be passed instead.

The Tech is still awaiting clarification from Senior Advisor for Communications Michael Rutter, but from President Reif’s statement, it appears clear that graduate students’ taxes will be affected by the House bill.