Among tax bill’s offenses, an insult to students
At 1:51 a.m. on Saturday morning, 51 Senate Republicans approved a tax bill both huge and nasty. Among other features, the Tax Cuts and Jobs Act could increase the number of uninsured Americans by 13 million, jeopardize spending for social safety net programs, and savagely redistribute income from lower- and middle-income taxpayers to corporations and high-income business owners.
Mercifully the Senate version of the bill omits one devilish feature of the House’s corresponding tax proposal. Namely, the House bill strikes Section 117(d) of the U.S. tax code, which excludes qualified tuition reduction from taxpayers’ gross income. Students receiving tuition waivers — an industry standard for PhDs — could see their effective tax rates balloon 30–40 percent. At MIT many students’ income will “increase” by $48,452, leading to tax burdens of over $10,000 on stipends as low as $33,000.
While still just a bill on Capitol Hill, the civic logic of Schoolhouse Rock! is moving this proposal steadily toward Donald Trump’s grievous pen. On Monday night, the House sent the bill to a conference committee where representatives will reconcile the differences between competing versions of the bill, including the question of Section 117(d).
President Reif’s community-wide email on Nov. 16 indicated that, should the change become law, MIT would provide additional financial aid to mitigate the increased student tax burden. While I am reassured by the Institute’s response, the current threat is also an opportunity to recognize the role of unconscionably high tuition in Congress’s calculus. In the case of many graduate students, stratospheric tuition is simply a markup used to sweeten the eventual markdown, much as a politician may propose an undesirable provision as a bargaining chip for moderate gain. While MIT bears no responsibility for this attack on higher education, this scandal calls into question the decency of a bizarre semesterly ceremony: MIT cutting a check to itself, we hope on our behalf.
Scott Middleton is a graduate student in the Department of Urban Studies and Planning.