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Let's face it - this is a dubious tactic adopted by schools. The latest leaks show universities stashing money offshore. Just clean up your act - Phds are free

Let's face it - this is a dubious tactic adopted by schools. The latest leaks show universities stashing money offshore. Just clean up your act - Phds are free labor, don't swallow federal grants for exploiting them

aub3bhat 9y ago
This isn't about dubious tactic at all, if the government thinks its dubious it could simply direct NSF/NIH to disallow amount from being used to pay tuition and lower overhead allowed. You don't even need any legislation for that. In fact PhD's are merely a collateral damage in ending tution tax exemption which affects all students (and represents a much larger chunk when you account for number of undergrads). It's just that in other cases "per-student" effects are much lower, since either the student has no income or the lack of exemption mere dissuades parents from filling jointly.
irq11 9y ago
So, your logic is that it’s fine to tax tuition waivers as income, because the schools should be paying more? How does that work? This is a dubious tactic adopted by a sleazy political party to ram a bill through congress by taxing literally everything they can in order to make their other tax cuts look revenue neutral.
- gruturo 9y ago
  I don’t think that’s what the parent post means. Rather, they advocate slashing the tuition price, because universities are already paid - by the government! - and they get to benefit from a PhD student’s labor. Actually - Not merely slashing. Money should actually flow, but in the opposite direction.
  - azeotropic 9y ago
    Exactly. In the natural sciences, PhD students are typically required to register for a 'thesis' course, and their lab is billed for the 'tuition' for this course. The lab is already providing all the instruction and paying for facilities for research through overhead charges. The tuition is in fact a naked money grab by the universities, out of a lab's personnel budget, on top of what's already budgeted for overhead. If these tuition charges are merely overhead, then universities need to dispense with this accounting fiction and re-negotiate their overhead rates with the granting agency, who may decide they get better value at other institutions. If tuition is really a charge to cover some services a graduate student directly receives from the university, then the waiver is income to the graduate student and ought to be taxed the same way tuition remission is taxed for other university employees.
- defertoreptar 9y ago
  >How does that work? Say a company is paying Bob $40k to build a better mouse trap. He pays tax on the full $40k. Then, there's a national mouse problem, so the government gives the company $20k to stimulate research into better mouse traps. The company takes that money and offers to pay $20k worth of Bob's housing, food, and commute every year, but now only pays Bob $20k a year in salary. Bob doesn't mind this because he has the same disposable income after all is said and done. Except now, Bob only has to pay taxes on $20k.
  - stu2010 9y ago
    The graduate students in question here already pay income taxes on their stipend, which is used to cover housing, food, and commute. The only thing they get "tax free" is tuition, which they shouldn't be paying because in most cases they aren't even taking any classes.
    - defertoreptar 9y ago
      >The only thing they get "tax free" is tuition, which they shouldn't be paying because in most cases they aren't even taking any classes. That's my point. If you swap the $20k in my example to tuition, the economics is exactly the same. They're being charged it either way. The fact that the university is giving it "for free" allows them to pay the grad student that much less. As a result, taxable income vanishes.
  - irq11 9y ago
    That isn’t what happens at all. For all non-shitty programs (1), grad schools waive tuition for students regardless of grant funding. When a student gets a grant, it pays his/her salary, not tuition. (1) shitty programs make the student pay for everything; these programs are irrelevant to the conversation.
  - UncleMeat 9y ago
    Grad students don't get housing, food, and commute paid for by the university.
betterunix2 9y ago
"The latest leaks show universities stashing money offshore" Some universities, not universities in general.

aub3bhat 9y ago

This isn't about dubious tactic at all, if the government thinks its dubious it could simply direct NSF/NIH to disallow amount from being used to pay tuition and lower overhead allowed. You don't even need any legislation for that. In fact PhD's are merely a collateral damage in ending tution tax exemption which affects all students (and represents a much larger chunk when you account for number of undergrads). It's just that in other cases "per-student" effects are much lower, since either the student has no income or the lack of exemption mere dissuades parents from filling jointly.

irq11 9y ago

So, your logic is that it’s fine to tax tuition waivers as income, because the schools should be paying more? How does that work? This is a dubious tactic adopted by a sleazy political party to ram a bill through congress by taxing literally everything they can in order to make their other tax cuts look revenue neutral.

gruturo 9y ago
I don’t think that’s what the parent post means. Rather, they advocate slashing the tuition price, because universities are already paid - by the government! - and they get to benefit from a PhD student’s labor. Actually - Not merely slashing. Money should actually flow, but in the opposite direction.
- azeotropic 9y ago
  Exactly. In the natural sciences, PhD students are typically required to register for a 'thesis' course, and their lab is billed for the 'tuition' for this course. The lab is already providing all the instruction and paying for facilities for research through overhead charges. The tuition is in fact a naked money grab by the universities, out of a lab's personnel budget, on top of what's already budgeted for overhead. If these tuition charges are merely overhead, then universities need to dispense with this accounting fiction and re-negotiate their overhead rates with the granting agency, who may decide they get better value at other institutions. If tuition is really a charge to cover some services a graduate student directly receives from the university, then the waiver is income to the graduate student and ought to be taxed the same way tuition remission is taxed for other university employees.
defertoreptar 9y ago
>How does that work? Say a company is paying Bob $40k to build a better mouse trap. He pays tax on the full $40k. Then, there's a national mouse problem, so the government gives the company $20k to stimulate research into better mouse traps. The company takes that money and offers to pay $20k worth of Bob's housing, food, and commute every year, but now only pays Bob $20k a year in salary. Bob doesn't mind this because he has the same disposable income after all is said and done. Except now, Bob only has to pay taxes on $20k.
- stu2010 9y ago
  The graduate students in question here already pay income taxes on their stipend, which is used to cover housing, food, and commute. The only thing they get "tax free" is tuition, which they shouldn't be paying because in most cases they aren't even taking any classes.
  - defertoreptar 9y ago
    >The only thing they get "tax free" is tuition, which they shouldn't be paying because in most cases they aren't even taking any classes. That's my point. If you swap the $20k in my example to tuition, the economics is exactly the same. They're being charged it either way. The fact that the university is giving it "for free" allows them to pay the grad student that much less. As a result, taxable income vanishes.
- irq11 9y ago
  That isn’t what happens at all. For all non-shitty programs (1), grad schools waive tuition for students regardless of grant funding. When a student gets a grant, it pays his/her salary, not tuition. (1) shitty programs make the student pay for everything; these programs are irrelevant to the conversation.
- UncleMeat 9y ago
  Grad students don't get housing, food, and commute paid for by the university.

betterunix2 9y ago

"The latest leaks show universities stashing money offshore" Some universities, not universities in general.