My perspective on the proposed tax bill H.R.1
Joining thousands of other activists at the March for Science last spring, I proudly held my handcrafted, glittery poster in the air. “Girls just wanna have FUNding,” it said. Now, I realize I should have been more specific: “Girls just wanna have FUNding–for their research, but also for themselves.”
A poster large enough to accommodate all that text might have been difficult to march with, but the House of Representatives newly proposed tax bill, H.R.1, warrants it. H.R.1 would have devastating consequences on graduate students by treating graduate student tuition as taxable income by dissolving the tuition wavier. The tuition waiver does not count the tuition that PhD students have paid for as taxable income, meaning these students only pay taxes on the stipend they receive. It’s important to note that this bill is still in draft form, and the Senate’s proposed tax reform, while not without its own adverse consequences on higher education, does not include this provision. Nonetheless, I think it is important to draw attention to how this bill would hurt students, and most importantly the alarming message it sends to the country about how little our elected officials value higher education.
But first, I think there is some confusion about what a PhD program is. “You get paid to go to school? HOW?”
In brief, a PhD is a full-time research job aimed at tackling unanswered questions. During the course of study, you also take and teach classes and publish novel findings. Your advisor pays your tuition through grant money the lab is awarded or a fellowship you apply for. You receive a small stipend to live off of during the course of your degree. The stipend varies, based largely on cost of living (Boston is expensive). Mine is $39,000. The ~$32.5k I take home post-taxes is not a lot of money in this city, but if I buy off-brand yogurt and live in a tiny apartment 20 minutes from campus with two roommates, it’s livable. However, the key is not only a modest lifestyle. A huge factor in how I’m able to pursue this six-plus year journey without incurring debt is because the current tax code does not treat my tuition as income.
Contrast this with the House’s tax proposal with some back-of-the-envelope calculations. My tuition at MIT is $49,580 annually. My math may not be 100% here, but from what I understand if I add this to the $39,000 per year I make, I’m being taxed on a theoretical income of $88,580. Even with the increased $12,000 standard deduction, I’m paying 12% on the next $33,000, and 25% on the remaining $43,580. This increases my federal taxes to nearly $15,000, almost 40% of my stipend (my rent is 40% of my stipend!). Having my tuition covered is a huge benefit I am grateful for, but it doesn’t reflect economic reality to tax this number as if it were tangible money received.
The consequence of this bill is that a PhD suddenly becomes cost-prohibitive. It’s no longer affordable to take six years of low pay to tackle risky and unpredictable research projects and near impossible to do so debt-free. If assuming debt was necessary to pursue this path, I wouldn’t have made the same choice. I’d be an entry level engineer at a biomedical device company, not investigating mechanisms of drug resistance in skin cancer, or how the immune reaction to drugs in glioblastoma can be exploited to increase treatment efficacy. Maybe someone else would have taken my place, but maybe not. My fear is this policy change would disincentivize many students from a PhD.
Being a PhD student is a job, but also a training program, and an apprenticeship in research and teaching. A time to explore, to try risky science, and to fail. PhD students do great work that is often not undertaken by private industry because we are not constrained by financial pressure to turn research projects into profits. You lose the graduate student work horses of the academic machine, and the research simply won’t get done.
But look, it’s not solely about the money. The larger concern here is the lack of importance our government officials place on higher education. We, as a country, want to be at the forefront of technological advancement, but if you take away our ability to do that, whether it be through cutting our funding sources or making it financially unaffordable for student to pursue PhDs, our progress is going to slow down. Your future policy makers, teachers, scientists, engineering leaders and more are coming from higher education. How can we expect to keep up if you are taking out a key part of the work force?
If there is a bright side, it’s that this bill is only a draft. Things can change. I’m not totally freaking out (yet), but we shouldn’t ignore that this policy change is even on the table as being a reasonable solution to make up for tax cuts elsewhere.
H.R.1, you can do better.