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Against a Tax Increase on Berkeley Students
- cgb223 9y agoIts funny, so many of the people I speak with who either go to or went to Berkeley support raising taxes. They think if the government is better funded, it can provide more social good. But now that it's actually happening to them, there's this massive pushback. I don't know if this tax bill will be beneficial or not, I'm a coder, not an economist, but I do think there's just a bit of irony happening with this proposed tax increase.
- 52804375092485 9y agoI think the part you're missing is that they support raising taxes on the very wealthy, not on college students who are barely scraping by as it is...
- friedman23 9y agooh those poor poor Berkeley college students
- krastanov 9y agoThe demographics of college students and graduate students are nothing alike, and the article is about graduate students.
- JohnTHaller 9y ago53% of Berkeley students have under $30k a year of income and receive an average of $14000 in aid.
- megaman22 9y agoWhat are the 47% who make more than 30k a year doing, and going to school at the same time?
- klipt 9y agoIf they're undergrads that's probably counting their parents' income, not their own.
- jedberg 9y agoI worked in University IT and made over $30K working part time during the school year and full time in the summer, as did most of my coworkers. Also, we made slightly more than the normal person because Social Security tax is waived for working students, so that's like a 7% bonus. When you're in the Bay Area and your students can choose to work for the University or go get a paid internship down the road, you have to compete on wages.
- Retric 9y agoThis plan is not raising taxes, the total amount being collected ends up less. This is shifting tax burden from group X to group Y. I would be in favor of collecting enough money to start paying down the national debt. But, only if that money is collected evenly across the tax base not simply shifted to tiny sub groups.
- krastanov 9y agoThe outrage seems reasonable, not ironic or hypocritical. I want to pay higher taxes (and I do donate money to charities and NGOs), but I do not want my taxes to be used to cover for the tax breaks of the super rich. We are in this all together, and we should all work to make our world better. You can argue that the government is bad at spending that money, but this is a completely separate complaint.
- ams6110 9y agoThe rich already pay the lions share of income tax. How much more of their money needs to be taken from them to make it fair? Also the argument that the government is bad at spending money is exactly the point. I would possibly be supportive of higher taxes if I thought the money would be used to pay for useful things.
- krastanov 9y agoTo your claim about lion's shares: the federal tax code is progressive by a very slim margin, while state tax codes are regressive. Therefore, no, percentage-wise the rich are not paying more. And the complaint is that this particular plan will let the rich pay less, not that the rich should pay more.
- paulsutter 9y ago45% of households pay no income tax at all. I'm not saying taxes are fair or balanced or anything like that. I'm just responding to your claim that the tax code is progressive by a "very slim margin". https://www.marketwatch.com/story/45-of-americans-pay-no-federal-income-tax-2016-02-24 https://www.marketwatch.com/story/45-of-americans-pay-no-fed...
- krastanov 9y agoI thought that "progressive" and "regressive" refer to what percentage tax you pay given what bracket (in dollars, not in percentile) you are. I would have thought that the 45% mentioned in the article is proof of how many Americans are poor, not that the tax plan is progressive. Even with a moderately regressive income tax the rich will be paying more total tax even though they are paying a smaller percentage of their income as tax. Therefore you can not make any conclusions about the fairness of a tax by saying that the top 20% of earners pay 80% of the total amount of income tax (it would have been absolutely crazy if this was not the case, unless everybody had the same income). As such, I do not see how this article can be used to say anything about whether the tax is progressive or regressive (and as you mentioned, whether it is fair altogether).
- maxerickson 9y agoIt's more complicated than that though, the income that is going to be taxed here isn't money that gets handed to the students to do what they want with, it is money that the university pretends to pay them and then gives to itself. The sensible way to eliminate the special tax treatment would be to first change how the university does the accounting, so that a bunch of stuff that the university does for university purposes doesn't get imputed to the student as income.
- gbacon 9y agoEveryone thinks he pays his fair share of taxes. It’s that guy down the road …
- kolbe 9y agoWell, that's because everyone is undertaxed but me.
- jrs95 9y agoThis isn't really that unusual since most of these students to tend to have low incomes when they'd be affected by this. What is funny though is how upset people were about potentially losing the ability to deduct state and local taxes, which is something that would predominately affect upper middle class people living in blue states who tend to support tax increases. Just on richer rich people than them, apparently.
- jogjayr 9y agoIt seems reasonable to be against taking away tax deductions for state and local taxes; you're asking to be able to deduct taxes paid to a government. As a counter-example, it's also legal to take deductions for foreign taxes paid on foreign income. And plenty of lower-income people also pay state and local taxes. It's hardly the same thing as taking away, say, the mortgage interest deduction.
- rconti 9y agoProbably because they support taxes on actual income, not taxes on money they've never seen.
- camiller 9y agoarguably, the tuition being waived does have a value and is given as part of employment compensation. How would it be any different that if my employer provided a free gym membership, which is considered taxable income even though it is money I never get.
- eli_gottlieb 9y agoGenerally most people regard it as unjust to charge income tax on money that is never made as income.
- CWuestefeld 9y agoI'm pretty sure this is false. That's why folks don't use barter in order to increase their buying power by a third. Even if dollars didn't change hands, the value of what did still counts for your taxes. Even campaign finance laws reflect this. Suppose you're an airline and you write off the costs of a candidate's tickets when he flies around the country campaigning. The value of those tickets must be recognized as a campaign contribution.
- eli_gottlieb 9y ago>Even campaign finance laws reflect this. Suppose you're an airline and you write off the costs of a candidate's tickets when he flies around the country campaigning. The value of those tickets must be recognized as a campaign contribution. Ah, but you don't write off the costs of airplane tickets for the cabin staff, which is what would really fix the analogy here. Grad-students are serving as employees and trainees of their advisors. In industry, you would never, ever ask a trainee to pay twice their wages in "training costs" to their employer. They'd leave, and never look back. I agree with people in the other thread that we really should find a way to end the legal fiction that PhD students with "tuition waivers" are being charged or paying any tuition at all. They're something between interns and entry-level employees, except of course that charging interns for the internship remains illegal.
- CWuestefeld 9y agoPerhaps there are really two separate relationships between the school and the grad student, and we're confusing everything by conflating them. On one hand they're acting as researchers and TAs, and being paid (a pittance) for that. On the other hand, they're students buying educational services from the school, which they're putatively paying for out of their compensation package.
- jbob2000 9y agoIt's still income even though it never hits your bank account. Other students who pay their own tuition don't have this luxury. I'm surprised graduate level students at an Ivy league school can't figure this out, but then again, it's not in their interest.
- kyleschiller 9y agoStudents who pay their own tuition (i.e. are not on financial aid) are almost by definition wealthy. That's why they don't have the "luxury" of lower taxes.
- krastanov 9y agoYou are arguing semantics not substance. The complaint is that (1) there is an effective tax hike (2) that is used to cover tax cuts for already well-off demographic. Plenty of people would be fine with point 1 as long as the money is used to help to country / lower the deficit / pay national debt / invest in infrastructure. But people are unhappy with point 2 - the money is used to fund tax-cuts for the super rich.
- jbob2000 9y agoWell, arguably, the students were taking advantage of a loophole. They were receiving income and it wasn't being taxed, it's just that the letter of the law didn't consider this a form of income. They're still earning $10,000, it's still income, it's just coming off the paycheque before they receive it. But I do agree that this is the stupidest, pettiest loophole to close, especially because it's funding cuts of people who absolutely do not need them.
- allenz 9y agoDo you also believe that cancer survivors should be taxed $100k+ on their income from health insurance?
- klipt 9y agoDon't give the Republicans any ideas!
- LusoTycoon 9y agoThe 2nd comment in the article reveals some interesting things. Basically tuition is usually not charged for Phd students but is used for accounting purposes to get money from Federal agencies. The "tax increase" would stop incentivizing universities to do these accounting tricks and declare tuiton as 0. This is a good step in that tax code is simplified and accounting tricks / loopholes are closed for corporations and universities (and other public/private entities). This is what I read, can anyone clarify this? " But from an outside perspective, the current rules look like a money laundering scheme. Universities use an accounting gimmick of setting an arbitrary dollar amount for PhD student tuition, and then waive it. At least in STEM fields, essentially no PhD student actually pays tuition. Why not just set tuition to 0? The reason is because “tuition” can be charged to funding agencies, and so this accounting trick of setting and then waiving tuition allows universities to extract more overhead from the NSF, NIH, etc. Of course, this accounting trick represents a non-trivial fraction of government support for academic research. It seems natural to simplify the tax code by disallowing this trick, but unless the goal is to de-fund academia (maybe it is), it should be countered with an increase in direct funding to universities from funding bodies. "
- klipt 9y agoIt seems like the Republicans are applying double standards here to universities vs regular businesses. Businesses can reimburse employee expenses, deduct those from taxable revenue as a business expense, and the employee doesn't have to pay tax on the reimbursement. Grad students are essentially employees of the university, if they're being reimbursed tuition costs why should they have to pay taxes on a reimbursed expense when other employees don't?
- jrs95 9y agoBecause businesses pay people who vote Republican, and universities pay people who vote Democrat. That's a bit of an oversimplification of course, but that sort of thing is always in play. Both parties tend to have biases that conveniently align with the demographic that votes for them or supports their ideology.
- bklyn11201 9y ago
- PatientTrades 9y agoEveryone is for higher taxes until it affects them personally of course. Berkeley is essentially an ivy league school and a guaranteed ticket to a upper/middle class life. Asking their students to pay more and help the government stay funded is too much to ask though.
- krastanov 9y agoYou are confusing college students and graduate students - their demographics are very different. This article is about graduate students for whom it is not uncommon to have done their college years in less expensive and less renowned universities. Grad students have fairly low salaries for their level of expertise (but there are other benefits to grad school). Most liberals will be happy with a reasonable tax hike that is used to help the country. This one is used to cut taxes for the rich - this is why people are unhappy.
- Upvoter33 9y agoIf this change goes into effect, I'm not sure a real problem will occur. The reason is that many students will not be able to afford this change. Thus, universities will have to drop the tuition for such students altogether (instead of charging NSF or other funding agencies for it). Schools will then (eventually) respond by raising "overhead" on grants to make up for the shortfall. The net effect, thus, may be zero.
- glauque 9y agoFinally someone is pointing at the elephant in the room. When I look at my student billing account, I see $60,000 waived under my grad "tuition waiver" every year. Should I feel thankful, or completely dumbfounded by the fact that they'd consider charging me that much to be a grad student in the first place?
- moab 9y agoBy taxing or putting extra burden on all but the students that absolutely can't afford to pay tuition or elevated taxes you're making an already sketchy financial proposition even sketchier. There were a few articles recently lamenting the declining numbers of American grad students. Measures like these are only going to cripple these numbers further.
- allenz 9y agoI don't think that school's will "just" be able to raise the overhead on grants. Congress has no plans to increase grant funding. Instead, grants will become more competitive. The net effect, then, is (1) unnecessarily increased competition for grad school, (2) defunding of education and research, and (3) decreased global competitiveness. I think it's a real problem.
- harryh 9y agoThere was a fairly large discussion on this topic yesterday: https://news.ycombinator.com/item?id=15646571 https://news.ycombinator.com/item?id=15646571
- jostmey 9y agoThe problem isn't that republicans want to tax graduate students (I think they should be taxed). The problem is that Universities classify their "employees" as students and then pay them very little. The underlying issue here is that graduate students are not paid well and are not really students
- smanzer 9y agoExactly - appreciating this fact could help clear up other disputes in this thread. For STEM Ph.Ds you are really only a "student" for 1-2 years tops (when you actually take some classes) - after that, you are an entry-level employee. Your advisor is more of a boss than a teacher.
- smanzer 9y agoI finished a chemistry Ph.D. at Berkeley in 2016 - the way that the university handled "tuition" for science graduate students always seemed like a scam to me during my time there. In the early 2010s, we all made ~$28K/yr, while the university pocketed a comparable sum from the funding agencies as "tuition." I assume that they spent it like any other general tuition funds. For the vast majority of the time during a typical graduate career, everyone was working on individual research. I suppose the "tuition" could be interpreted as paying for the 1 hr a week of meeting with your advisor (when they weren't blowing you off for conference travel), but that seems like a stretch. That money should stay in the sciences, and ideally be used to pay grad students more. So it would be good for universities to get rid of this money laundering scheme, but I worry very much for the folks that I know who are still in the system who may be hurt by this. I think this problem should be treated in some way less likely to hurt vulnerable people.
- notyourday 9y agoBerkeley is crawling with people who are foam at the mouth liberals that love taxes. Why are they upset?
- rconti 9y agoThis generalization has zero value, and that's before we even get into the specifics of the argument.
- valuearb 9y agoDon't tax you! Don't tax me! Tax that person behind the tree!