Tax Changes Could 'Devastate' Graduate Students and American Competitiveness
Watch Gary Lane's Set it Straight interview with George Washington University Professor Joseph Cordes to find out how revisions in the tax code could possibly prove devastating to American college graduate students and U.S. competitiveness.
Now that the U.S. Senate has approved Republican tax reform legislation, differences must be reconciled with the House of Representatives before a final bill can be signed and enacted into law.
One provision in the House bill is causing concern on U.S. college campuses and universities--especially for graduate students. They warn if the change appears in the final tax bill that will likely be signed by President Trump, the cost to college research, graduate sudents, and American competitiveness around the world could prove devastating.
The House bill repeals a provision in the current tax code that exempts graduate students from paying federal income tax on tuition costs waived by their schools. The provision has been a part of U.S. tax law for more than 50-years.
George Washington University Professor Joseph Cordes worked with President Ronald Reagan on tax reform. He says if graduate students are forced to pay taxes on their tuition, “we would see many fewer graduate students in universities and colleges throughout the U.S.”
Cordes says it's quite likely that universities will react to the change by increasing the cash portion of the graduate student awards.
"Now, that's good news for the graduate students because it will lessent the tax burden on them, it's not good news for the univerisites because it will increase the cost of graduate education..."