4 ms·

I sympthatize with the article and the person writing it, but if they shouldn't be taxed, why should people who pay post tax income for their undergraduate deg

by tabeth 9y ago

I sympthatize with the article and the person writing it, but if they shouldn't be taxed, why should people who pay post tax income for their undergraduate degree?

jogjayr 9y ago
You can already take a tax deduction for eligible educational expenses for yourself or dependents. Undergraduate tuition certainly falls under that
thephyber 9y ago
This seems like apples and oranges. In exchange for work, grad students usually get a combination of a stipend and free/subsidized tuition. This is described in the second paragraph of TFA. > why should people who pay post tax income for their undergraduate degree Are they being paid to get their undergrad degree? Most likely they are paying. And tuition at an accredited educational institution has traditionally been tax deductible, so it's not technically "post-tax income".
- alistairSH 9y ago
  If your income is at a level where you are paying cash for tuition, you likely do not qualify for education-related tax benefits. AOTC requires AGI <$80k ($160k married/joint) LLC requires AGI <$65k ($130k married/joint) Tuition deduction requires AGI <$80k ($160k married/joint)
scott_s 9y ago
Because funded grad students are paid way, way below what they could get in a "real job" because it's an arrangement that benefits all: the grad student get the education and the degree, and the schools get cheap labor. Undergrads are typically not full-time employees of the school they attend. Funded grad students are. And for PhD students that are no longer taking classes, they are typically a net-positive in terms of cost. For example, in my last two years of PhD, I was both a teaching assistant and an instructor. When grading finals weeks before graduating, one of the instructors I was a TA for joked that he's surprised they were letting me graduate because I was far too useful.
- tabeth 9y ago
  The fact that they're paid below a "real job" is irrelevant. Should people working part time while doing their undergrad degree to pay if off also get the same benefit? Like TAs they too are getting paid less than what they would with a "real job", working full time. Not to mention getting a graduate degree is a relative privilege to begin with. Either everyone should get the benefit, or they should take loans out and not be required to work like everyone else. Anything else is just hypocrisy.
  - scott_s 9y ago
    The "real job" point is that people willingly are paid very little because of the arrangement. Undergrads are typically not full-time employees of the university, so it doesn't make sense for them to get the waiver. But, if an undergrad had a full scholarship from a university, I would also not want that taxed as income. It's this arrangement that enables more people to become grad students, not less. As the NYT opinion piece points out, these new rules will make it that only people who are independently wealthy, or can depend on support from wealthier family members, will be able to afford going to grad school.
    - tabeth 9y ago
      > As the NYT opinion piece points out, these new rules will make it that only people who are independently wealthy, or can depend on support from wealthier family members, will be able to afford going to grad school. Again, the NYT article is fallacious. Such a student could take out loans, just like undergraduate students. It's nonsensical. There's no reason for admission and payment to be coupled. Also, the amount being paid is irrelevant. A university could pay graduate students $33k/yr + whatever it costs to attend their institution. The only reason they don't do this is because they'd be taxed. This arrangement is beneficial to the university. Not to mention the student would be taxed more heavily as well.
      - scott_s 9y ago
        > A university could pay graduate students $33k/yr + whatever it costs to attend their institution. The only reason they don't do this is because they'd be taxed. The reason they don't do it is because for a large population of the grad students, it doesn't cost the university that much for that student to be at their school. Loans are an extra burden, and grad school is an unbounded process. I spent 7.5 years in grad school. In practice, far, far fewer people will do it, and it will tend to be people who are already much better off financially. This will hinder class and economic upward mobility.
danarlow 9y ago
The graduate student is only getting paid $33k/yr. The university is paying for/waiving the student's $50k/yr tuition. Why should the student pay taxes on what the university is paying?
- tabeth 9y ago
  Except they're not being paid just $33k/yr. The IRS already has a precedent surrounding cash-value equivalents.

by tabeth 9y ago

I sympthatize with the article and the person writing it, but if they shouldn't be taxed, why should people who pay post tax income for their undergraduate degree?

jogjayr 9y ago

You can already take a tax deduction for eligible educational expenses for yourself or dependents. Undergraduate tuition certainly falls under that

thephyber 9y ago

This seems like apples and oranges. In exchange for work, grad students usually get a combination of a stipend and free/subsidized tuition. This is described in the second paragraph of TFA. > why should people who pay post tax income for their undergraduate degree Are they being paid to get their undergrad degree? Most likely they are paying. And tuition at an accredited educational institution has traditionally been tax deductible, so it's not technically "post-tax income".

alistairSH 9y ago
If your income is at a level where you are paying cash for tuition, you likely do not qualify for education-related tax benefits. AOTC requires AGI <$80k ($160k married/joint) LLC requires AGI <$65k ($130k married/joint) Tuition deduction requires AGI <$80k ($160k married/joint)

scott_s 9y ago

Because funded grad students are paid way, way below what they could get in a "real job" because it's an arrangement that benefits all: the grad student get the education and the degree, and the schools get cheap labor. Undergrads are typically not full-time employees of the school they attend. Funded grad students are. And for PhD students that are no longer taking classes, they are typically a net-positive in terms of cost. For example, in my last two years of PhD, I was both a teaching assistant and an instructor. When grading finals weeks before graduating, one of the instructors I was a TA for joked that he's surprised they were letting me graduate because I was far too useful.

tabeth 9y ago
The fact that they're paid below a "real job" is irrelevant. Should people working part time while doing their undergrad degree to pay if off also get the same benefit? Like TAs they too are getting paid less than what they would with a "real job", working full time. Not to mention getting a graduate degree is a relative privilege to begin with. Either everyone should get the benefit, or they should take loans out and not be required to work like everyone else. Anything else is just hypocrisy.
- scott_s 9y ago
  The "real job" point is that people willingly are paid very little because of the arrangement. Undergrads are typically not full-time employees of the university, so it doesn't make sense for them to get the waiver. But, if an undergrad had a full scholarship from a university, I would also not want that taxed as income. It's this arrangement that enables more people to become grad students, not less. As the NYT opinion piece points out, these new rules will make it that only people who are independently wealthy, or can depend on support from wealthier family members, will be able to afford going to grad school.
  - tabeth 9y ago
    > As the NYT opinion piece points out, these new rules will make it that only people who are independently wealthy, or can depend on support from wealthier family members, will be able to afford going to grad school. Again, the NYT article is fallacious. Such a student could take out loans, just like undergraduate students. It's nonsensical. There's no reason for admission and payment to be coupled. Also, the amount being paid is irrelevant. A university could pay graduate students $33k/yr + whatever it costs to attend their institution. The only reason they don't do this is because they'd be taxed. This arrangement is beneficial to the university. Not to mention the student would be taxed more heavily as well.
    - scott_s 9y ago
      > A university could pay graduate students $33k/yr + whatever it costs to attend their institution. The only reason they don't do this is because they'd be taxed. The reason they don't do it is because for a large population of the grad students, it doesn't cost the university that much for that student to be at their school. Loans are an extra burden, and grad school is an unbounded process. I spent 7.5 years in grad school. In practice, far, far fewer people will do it, and it will tend to be people who are already much better off financially. This will hinder class and economic upward mobility.

danarlow 9y ago

The graduate student is only getting paid $33k/yr. The university is paying for/waiving the student's $50k/yr tuition. Why should the student pay taxes on what the university is paying?

tabeth 9y ago
Except they're not being paid just $33k/yr. The IRS already has a precedent surrounding cash-value equivalents.