Grad Students Would Be Hit By Massive Tax Hike Under House GOP Plan The plan would raise taxes on graduate students, who make very little money to begin with. Analysts say the provision could discourage students from seeking advanced degrees, hurting economic growth.
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Grad Students Would Be Hit By Massive Tax Hike Under House GOP Plan

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Grad Students Would Be Hit By Massive Tax Hike Under House GOP Plan

Grad Students Would Be Hit By Massive Tax Hike Under House GOP Plan

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ELISE HU, HOST:

Now to some numbers in the Republican tax plan - to help pay for more than a trillion dollars in tax cuts for U.S. corporations, the plan would raise taxes on some Americans, including graduate students. They famously make very little to begin with. And the tax hike on them would be huge. Here's NPR's Chris Arnold.

CHRIS ARNOLD, BYLINE: A lunchtime talk about the Republican tax plan is getting underway at MIT. Now, a talk about tax policy might sound kind of boring, but the room is packed. Grad students are wide awake and focused on this tax plan because of what it would mean for them.

TAMAR OOSTROM: The past week, this is what I've been talking about with other graduate students, with classmates. I think we're all shocked.

ARNOLD: Tamar Oostrom is a third-year economics Ph.D. student. She and her classmates have been crunching the numbers. And the impact is pretty flabbergasting.

OOSTROM: This bill would increase our tax by 300, 400 percent. I think it's absolutely crazy.

ARNOLD: OK, here's how this works. Many grad students - on top of their studies - they basically have campus jobs. They do research for professors. They teach classes. And in return, they get a modest stipend, and they don't pay tuition.

RYAN HILL: I do a lot of teaching in order to get that tuition waiver.

ARNOLD: Ryan Hill is in his fourth year of getting a Ph.D. MIT pays him a stipend of around $30,000. Students pay taxes on that already. But tuition technically costs $50,000 a year. Hill doesn't pay that. He gets that for free. But the Republican tax plan would make grad students count the value of that free tuition as income, which means a big tax increase. Many would have to pay about half the actual money they get, their stipend, in taxes.

Hill and his wife just had a baby. She's working part time.

HILL: I wish we didn't have to stress about money as much as we already do. It's stressful for both of us and especially when you're so busy with your family and school. And it's been already very hard to just emotionally get through this time of life because we have to be so frugal.

ARNOLD: Hill says he and his wife gave up having dental insurance to save money. His wife is sewing clothes for their baby so that they don't have to buy them. So the grad students here might be studying super advanced stuff - artificial intelligence, nano materials - but they live very Spartan lives. Hill's from Utah. And he says everybody in his family's a Republican.

HILL: It's a very conservative part of the country. I was registered as a Republican.

ARNOLD: He recently became an Independent. But he says that this plan from Republicans in Congress for a big tax hike on grad students just makes no sense.

HILL: I just was shocked. From an economics perspective, like, a basic principle is that when you tax something you get less of it.

ARNOLD: Meaning this tax would mean fewer grad students - many young people just wouldn't be willing to go into massive debt, he says. They'd just go get a job instead of getting a Ph.D. And that would be a problem because any economist will tell you that the country needs a more highly educated workforce. That's where the good-paying jobs are. It drives innovation.

KATIE SHULENBERGER: Putting a tax on that and putting a barrier to us getting that education to be able to do that doesn't make sense.

ARNOLD: Katie Shulenberger's getting a Ph.D. in chemistry.

SHULENBERGER: What I want to do with my life is I want to be a professor. I want to teach.

ARNOLD: But right now she's huddled with other members of the MIT Graduate Student Council. They're planning a Call Your Representative In Congress event for fellow students.

UNIDENTIFIED MAN: We definitely want to be before any sort of floor debate.

SHULENBERGER: The House floor debate...

UNIDENTIFIED MAN: Yeah...

SHULENBERGER: I don't know...

UNIDENTIFIED MAN: ...We'll find out.

SHULENBERGER: ...I mean, I just read another article online that said, like, they're actually taking note of graduate students' mobilizing and response to this, so it's not...

ARNOLD: Their bottom-line message - don't slap a huge tax on low-wage earning grad students to help pay for a trillion dollar corporate tax cut. And university administrators across the country are calling Washington, too. One we spoke to said this is, quote, "the most serious threat to doctoral education ever." The proposal, though, is only in the House bill, not the Senate tax bill. So a lot of graduate students are hoping it doesn't survive. Chris Arnold, NPR News.

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