3 ms·
>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 t
by 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 agoThe 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 agoThat 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 agoGrad students don't get housing, food, and commute paid for by the university.