cpsylist: FW: Taking Action on Grad Student Tax
Ellen McWhirter
ellenmcw at uoregon.edu
Mon Nov 27 12:26:13 PST 2017
CPSY community and alumni,
Please see the important action request below, as well as today’s message from University of Oregon president Michael Schill (pasted at the bottom of the email for the benefit of our alumni). Even if you know that your state legislators are against the graduate student tax and other aspects of the tax proposals, it is critically important to express your views to them. This is no time to be a silent majority.
Best,
Ellen
*******************************************
Ellen Hawley McWhirter, Ph.D.
Ann Swindells Professor of Counseling Psychology
Director, Spanish Language Psych. Services & Research Specialization
Counseling Psychology Program
5251 University of Oregon
Eugene, OR 97403-5251
(541) 346-2443 (office)
(541) 346-6778 (fax)
https://education.uoregon.edu/users/emcwhirter
I support all students regardless of immigration status or country of origin. As a member of the UO Dreamers Working Group, I support Dreamer students and promote their sense of belonging and safety as they pursue their higher education goals. For more information and resources please visit our Dreamers page (https://blogs.uoregon.edu/dreamers/) and the Immigration FAQs page (http://international.uoregon.edu/immigration_faq ). Remember, when interacting with faculty, staff, and offices around campus you are never required to reveal your status.
-------- Original Message --------
Subject: Taking Action on Grad Student Tax
Date: 2017/11/25 13:51
From: Hillel Samlan <hsamlan at uoregon.edu<mailto:hsamlan at uoregon.edu>>
To: Cpsystudents <cpsystudents at lists.uoregon.edu<mailto:cpsystudents at lists.uoregon.edu>>
Hi All,
As you may know, this month the US Congress passed a version of the "Tax
Cuts and Jobs Act" which would modify the federal tax code to have
graduate student tuition waivers counted as income and subject to taxes.
For graduate students in our department, this would translate into a
$2000 increase in annual taxes. For our peers at private institutions,
this would mean tax increases around $8,000.
I am writing to ask you to take at least one action to try and prevent
this provision from ending up in the Senate or reconciliation versions
of the bill. Here are some actions I hope you'll consider:
* The attached letter has contact information for key senators -
please contact them, or friends you have in their states to let them
know that this issue is important to you.
* In coordination with grads across the country, our campus will be
participating in a national Grad Tax Walkout/RALLY ON WEDNESDAY 11/29 AT
10:00AM AT THE EMU. Additionally, please let me know if you are willing
to share your story about how this tax increase would affect you.
* Please discuss this with your professional networks, campus
committees, associations, and listservs and encourage group action. I am
happy to provide more information and resources to share.
* Writing op-eds or letters to the editor, especially if you have
"home" connections in the states mentioned in the attached letter. Or
find other ways to take a public stance and raise awareness.
There are many other ways this bill harms us, such as cutting or
eliminating the Behavioral Health Workforce Education and Training
Program which led to a number of new HRSA funded APPIC internships in
rural and underserved areas. Cuts to SAMHSA, NIH, and Medicaid and other
programs would also negatively affect the communities we serve and our
profession. Feel free to take action with these other programs and those
less privileged in mind as well, but please also join in opposition to
the taxation of tuition waivers.
Please contact me if you have any questions, want more resources, or
would like to be involved in planning continued efforts.
Thanks,
Hillel Samlan
--
Hillel Samlan, M.A., M.S.
Assessment Specialist, University Counseling & Testing Center
Doctoral Candidate, Counseling Psychology
University of Oregon
Dear colleagues and friends,
For those of us in higher education, the period between Thanksgiving and New Year’s Day is about completing research projects, taking and grading exams, and planning for the winter term. This year, however, we should all be concerned with something going on thousands of miles away in Washington, DC—namely, tax reform efforts being considered by Congress. Simply put, many of the legislative proposals could substantially impede the ability of universities such as the University of Oregon to deliver an excellent, affordable education to our students.
Graduate students have the most to lose under this legislation. About 1,500 graduate students at the UO currently receive full or partial tuition remissions plus stipends. This financial support is vital in enabling them to afford years of graduate education without amassing huge debts. In return for this assistance and as part of their training, graduate students help support faculty research and teach undergraduate courses in the humanities, social sciences, STEM fields, and beyond. Tuition waivers or remissions to graduate students are not now taxable; this would change under the tax bill passed by the House of Representatives. Undergraduates would not be spared from unfavorable treatment. The bill also undermines the practice of lifelong learning by doing away with the lifelong learning credit that provides access to a diverse group of students, particularly nontraditional students. The House bill also proposes ending provisions that permit the deductibility of interest on student debt and the exclusion of the value of tuition waivers provided to university employees and/or their family members enrolled at Oregon universities.
The targeting of undergraduate and graduate students in the push for tax reform is the most damaging element of the legislation from the perspective of universities, but there is more. Under the bills being considered by both the House and the Senate, the standard deduction would be increased substantially and the estate tax would be eliminated. On the one hand, increasing the standard deduction—the amount that taxpayers get to deduct from their taxable income before applying their tax rate—sounds like good news. Proponents argue it will simplify and potentially lower taxes for millions and millions of Americans. Detractors dispute those benefits.
The problem is that universities increasingly rely upon charitable gifts from alumni and friends to support their operations. This is especially important at universities such as the UO, where state support accounts for roughly 8 percent of our total university budget. In the United States, the tax system provides an incentive for charitable giving by allowing donors to deduct from their taxable income the value of their gifts. But only people who itemize their deductions qualify for the charitable giving incentive. So, as more and more people choose the standard deduction in lieu of itemization, the incentive for charitable giving will go down, potentially costing universities across the nation billions of dollars a year. In a similar manner, the existence of an estate tax provides an incentive for people to give away money to charities like universities. Eliminating the estate tax would remove or reduce this incentive.
An additional provision in the tax law targeting private universities is a 1.4 percent excise tax on endowments of more than $250,000 per student. This provision will not affect the UO because of its status as a public institution. Nevertheless, the precedent of taxing university endowments is one that should give us all pause. It could easily be extended in the future to public universities and to schools with smaller endowments.
Why is Congress doing this? One explanation is that, in an effort to reduce the maximum corporate income tax rate from 35 percent to 20 percent while not ballooning the budget deficit, lawmakers are simply digging into all of the crevices of our nation’s metaphorical fiscal sofa looking for as much money as possible. After all, these bills also eliminate the deduction of state and local taxes and reduce the home mortgage interest deduction, two of the most popular tax breaks in the Internal Revenue Code. But, as recent articles in the media suggest, some see elements in the tax reform act as an assault on higher education.
I will leave it for our political scientists to speculate why some members of Congress apparently have chosen to target higher education. Here is what I am doing—and what I suggest that you, as students and members of the faculty and staff, can do. First, the University of Oregon is an active participant in the American Association of Universities and the Association of Public and Land-Grant Universities, and both organizations are actively lobbying Congress to restore the exclusions for graduation tuition waivers and employee tuition benefits as well as the deductibility of student loan interest. They are also arguing that the charitable giving deduction be universal—meaning that it be available to everyone in addition to the standard deduction. We support these efforts.
In addition, members of our governmental affairs staff and I have been meeting with our congressional delegation to let them know the impact of the current proposals on the UO and to urge them to vote against or modify them. If that is something that interests you, more information is available at the American Council on Education website<https://t.e2ma.net/click/k5gcz/8zod1g/owwttl>, including a portal to take action with Congress. While the House has already voted on its version of tax reform, the debate continues with the Senate taking a different approach.
Regardless of whether we succeed or fail in stopping elements in the tax reform legislation that negatively affect universities, it is clear that all of us—administrators, staff, students, faculty, alumni, and supporters—need to make the case that higher education in the United States should be cherished and nurtured, not targeted for cuts. Members of Congress and our state legislatures need to rededicate themselves to the idea that affordable higher education is more than a political slogan—it is a priority that needs to be supported with tax dollars. As the son of two parents who did not go to college, I experienced the transformational effect of higher education, and we need to make sure that that door is open to everyone who can benefit from passing through it. Expanding the Federal Pell Grant program, defending the security of DACA students, and expanding rather than reducing tuition support is a necessary component of that effort.
We also need to make the case for graduate education. Our graduate students will complete their education at the UO and go off to careers in academia, the professions, and industry. The research they do here and the work they will do in the future will advance knowledge, fuel the economy, and enlighten generations to come. Our nation eats its own seed corn by reducing our support for them by taxing their tuition waivers.
Sincerely,
Michael H. Schill
President and Professor of Law
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