A mandatory gift that is of no material benefit to the student that is generated as an administrative process is not the kind of gift that should be taxed.
This would be like taxing you because I asked you to hold onto a $20 bill for me while I reshuffled my wallet.
It's barter. The students are trading their time for an education. That is a value transfer. There is nothing mandatory about it. Each party is consensually entering into an agreement to transfer services that have non-trivial value. If you could simply escape taxation by bartering, you'd see a lot more bartering. But you don't, because barter is still legally taxable.
No. As noted elsewhere, no education is provided through 90% of these courses. They meet zero times per week and have no real instructor. They are a book keeping exercise so that PhD students are still technically students while working in the lab, not an actual tangible educational course.
This is a just a significant decrease in research funding that is, by default at least, implemented as a substantial tax increase on grad students (those bastards...?), who now pay tax on 40k/year of tuition for literally imaginary courses.
I agree the situation is awkward and stupid, but the material effect is what matters. Without a corresponding increase in science and education funding this is basically an enormous cut to science funding and undergraduate education funding. And it's one that is by default shouldered exclusively by people making 20k / year.
If it has no value, then there is no value to waive. If there is no value to waive, there is no value transfer. Either they should pay taxes on it, or the university should stop 'waiving' tuition and simply make it 'free'. What absolutely should not happen is a special entry in our tax policy for this perverted case.
If it is indeed simply a 'book keeping' exercise, then what it really is is an attempt to subvert some other policy. I'm not sure what that policy might be (student loan terms, perhaps?) But whatever it is, it's that policy that should change. Not tax policy.
> If it is indeed simply a 'book keeping' exercise, then what it really is is an attempt to subvert some other policy. I'm not sure what that policy might be (student loan terms, perhaps?) But whatever it is, it's that policy that should change. Not tax policy.
It's an attempt to recognize the problem of needing students to be fully enrolled to be defined as students often by law.
It's far easier to put in a tax waiver to take care of the consequences of that than it is to change that policy, at a state level, and figure out all the downstream issues of that - which will also probably impact the tax code.
For one thing, so they can be eligible for student services like health care. So student loan repayments don't trigger while they're still in school. Any international student on a student visa. Accurate tracking of which professors go to which graduate students, and the means to record their progress.
No, paying for things directly is how they ought to be paid for. Paying for them through tax cuts is why we have a perverse tax policy. If you want to subsidize something, subsidize it. Or, if it's so important, maybe the universities should be paying for it. They have plenty of money. That being said, I don't mind the government subsidizing research. What I do mind is them subsidizing it through tax policy.
No, what was stealthy was funding it this way in the first place. If you want to fund something, fund it. Don't fund it through tax policy. Tax policy should be about revenue collection, not funding research.
There is no actual income being made. This is imposing a tax on something that no one actually gets! It's an accounting procedure used by Universities so they can meet the requirements of you being a student by law.
I am a PhD student. My tuition of $30,000/year is waived by the University of California since I take no classes and am purely doing research. I need to be a student for various tax purposes for both the University and myself. If the money from my waiver was taxed, I would somehow have to come up with an extra $10,000 out of nowhere! Where do I find that money? My PhD is my job. The government is not funding anything, and I feel you're using that terminology purely to muddy the issue.
To be clear, I don't much care for your argument here. Regardless of your ideological concerns about the ideal way to tax stuff, this policy clearly hurts people who are already in a precarious financial position. It will have remarkably negative effects for students like me. I will simply have to drop out, and all of the domestic PhD students I know in STEM will as well. We can't afford to take out loans for taxes...
This policy has a clear goal. It's impact is what matters. Simply demanding that the tax code be simplified is in this case ludicrous. You're really missing the forest for the trees here - this effectively kills all STEM PhDs in the United States. It's impact would be devastating.
The fact that a policy hurts particular individuals is not a reason not to do it. To argue otherwise is to argue non-seriously. To argue otherwise on your own behalf, doubly-so.
> I need to be a student for various tax purposes for both the University and myself.
That sounds rather...Rube Goldbergian, doesn't it? Why do you think that is? That the university has to charge you a fee, and then waive it? Could it be that they are avoiding some other law, or regulation that is there, and that actually that law is the one that ought to be changed? Does it make sense to simply layer bureaucratic workarounds on top of each other? I'd say no, but some people like spaghetti code, I guess.
> This policy has a clear goal. It's impact is what matters. Simply demanding that the tax code be simplified is in this case ludicrous. You're really missing the forest for the trees here - this effectively kills all STEM PhDs in the United States. It's impact would be devastating.
No it wouldn't. Literally the only thing that would happen is universities would either:
a) Change the absurd "we charge you tuition and then waive it" system.
or
b) Offset the cost delta via a stipend of some kind.
It would not kill STEM, or any other kind of PhD program in the US, and it definitely wouldn't simply be passed on to students. If it did anything, it'd shift the balance more in favor of STEM PhDs and away from other, less remunerative degrees. But I doubt it'd even have that effect at the margin.
And finally, any time the government gives a tax credit, they are funding something. Tax credits are identical to government checks. Understanding this is absolutely essential to thinking about politics. When you donate money to a charity and receive a tax deduction for doing so, the federal government is effectively matching some 30% of your contribution. The reason the government chooses to fund things in this way is that it is more palatable to people. Just as you are doing now, they don't see 'tax credits' as an expenditure. But the truth is that taking money out of revenue collection is the exact same thing as writing a check. And this confusion among the general republic is a prime contributor to government waste and economic inefficiency generally.
EDIT: I should add, to be clear, that I don't think you or any PhD student should actually bear the burden of this tax. I'm saying that the tax policy being the way that it is is a bureaucratic workaround for a problem that is better solved another way, and it ought to be solved in that way, rather than addressed through tax policy.
> But the truth is that taking money out of revenue collection is the exact same thing as writing a check.
Pot, meet kettle. If this is the case, and if it's true that there's lots of "Rube Golderbian" infrastructure at play, why not implemented this policy -- in the short term with a long-term phase out -- as a direct budget cut to the NSF? As opposed to a 20% tax hike on people making 30k? The end effect on the national budget would be the same, without introducing lots a huge budgetary refactoring project.
> a) Change the absurd "we charge you tuition and then waive it" system.
But as a software person (?), you must understand that "ok make this big change to this complex system" isn't always a reasonable request given a 1 year timeframe.
In particular, I'm going to go out on a limb and conjecture that your edit is probably the only thing people actually care about. Everything else is missing the forest for the trees.
> Pot, meet kettle. If this is the case, and if it's true that there's lots of "Rube Golderbian" infrastructure at play, why not implemented this policy -- in the short term with a long-term phase out -- as a direct budget cut to the NSF? As opposed to a 20% tax hike on people making 30k? The end effect on the national budget would be the same, without introducing lots a huge budgetary refactoring project.
Because I don't think we should increase taxes on people making 30k 20%. I think we should eliminate cruft from the tax code. This is cruft.
> But as a software person (?), you must understand that "ok make this big change to this complex system" isn't always a reasonable request given a 1 year timeframe.
> In particular, I'm going to go out on a limb and conjecture that your edit is probably the only thing people actually care about. Everything else is missing the forest for the trees.
Sure, it's certainly possible that making the change immediately is the wrong move. I'm not sure I see the evidence for that in this particular case, but yes, sometimes that is so.
When thinking about tax policy, it's important to consider now how something makes you feel, and not the first-order consequences of the change, but the equilibrium consequences of the change. If you eliminate this loophole would grad students actually pay more? I very much doubt it. The university would find a way to equalize the price, either by modifying the silly tuition policy (a simple fix is make tuition $1 and then waive that), paying it for you, or by some other means.
My guess is that the change will also have no net effect on revenue collection, which makes it fairly worthless from the perspective of its authors, who are trying to justify tax cuts in other areas. But I still think it's a good idea, because anything that eliminates cruft from the tax code is a good idea, provided it doesn't cause undue harm elsewhere, which I think it is highly unlikely to in this case.
