How much money should Grad Students pay in taxes?
For those not up to date with the news : The House passed their version of the Republican Tax Plan.
Normally I never really worried about these because honestly I don’t make that much money and I’m ok with that. But this Tax Plan will affect us. Something I don’t think most graduate students think about is that we technically pay tuition on top of our modest graduate stipends. Up until now that was a figure we didn’t have to worry about because, the University takes care of it.
In my graduate stipend the University pays for around 14,000 dollars in tuition and up until now I really didn’t worry about that. I don’t plan on dropping out or anything so I wasn’t worried. I don’t have to pay taxes on that money and it didn’t matter.
The new tax plan changes all that. Instead of just being taxed on your graduate stipend, we’ll be taxed on the stipend + tuition. This means that my “income” will increase by roughly 44% and my monthly taxes would double and I’m fortunate. Virginia Tech has relatively low tuition but private schools like Harvard anticipates their graduate students would see a 400% tax increase.
All is not lost though and this is where my knowledge of American government is seriously lacking. The clause of interest is not present in the Senate Tax plan but I personally do not understand which voted on plan takes precedence or how that works.
Now to the ethics part of my post. This is about taxes and what purpose they have in a society. Taxes, to me, serve to pay for communal goods and services that we value. That’s usually elements at a state and federal level so: infrastructure, the military, NSF, oversight bodies such as EPA and CDC, and a host of other things. I guess it makes sense to me that those who make more should pay more and that is what we do. I don’t think someone making very little should pay the same as someone who makes millions. This is partly because if we decide the annual minimum cost of living in the US is around 16,000 for a single person with healthcare, it doesn’t seem ethical to me to tax so that their take home income is below that. It does make sense to tax someone making a million dollars, more, because they aren’t worried about covering basic needs.
A key element of this is what we define as “income” and that’s why the tax plan is so nuanced. I don’t think that money I don’t see seems much like income to me. But I do understand the argument. Technically that money is being given and paid for my benefit and while I never see it, I understand that someone else could use that money. The issue I don’t agree with, and I think many STEM graduate students will agree with me, is that my annual salary is worth the value of my stipend. I don’t make what I would in the field with an undergraduate degree in Environmental Engineering. In grad school I take the financial hit because I’m investing in my own future and am not going into further debt to do so.
This tax plan (if it’s passed) changes that equation. It creates a hierarchy where people who have money to pay excessive taxes, can go to private universities and the rest of us can’t. This plan affects professors,grad students and Universities and I am interested to see how they will react if it passes.