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So the problem is that all unearned income that isn't for tuition is being taxed the same, regardless of who it's coming from and who it's going to? Am I readin

So the problem is that all unearned income that isn't for tuition is being taxed the same, regardless of who it's coming from and who it's going to? Am I reading it right?

RIMR 7y ago
No, the problem is that all the unearned income is being taxed at a prohibitively high rate, regardless of whether or not it is being used for tuition, regardless of where it coming from, and regardless of who is receiving it. The rate they are using was established specifically to discourage wealthy people from exploiting tax laws to reduce their tax burdens. Now it is being used to discourage low-income students from accepting financial aid. It honestly seems perfectly in-line with the Republican agenda: Reduce low-income people's access to higher education, and bastardize an anti-tax-avoidance law so that they can excuse the subsequent repeal of said law at the benefit of tax-dodging autocrats.
- Vaslo 7y ago
  I mean it’s crazy. God forbid they contribute toward the free health care they get until 26-the nerve of those evil republicans and their responsibility nonsense
  - RIMR 7y ago
    Who the hell is getting "free health care" until they're 26? If you come from a low-income family, there's a damn good chance you're uninsured.
    - Vaslo 7y ago
      They have something called Medicaid, you should go read about it before you fall for the NYT agenda. It’s the people in the middle that get screwed, and it’s not just a republican issue
      - seppin 7y ago
        > It’s the people in the middle that get screwed Medicaid doesn't cover even a majority of lower income or younger Americans.
      - fzeroracer 7y ago
        I don't know about you, but I grew up dirt poor and on Apple Health (WA's version of Medicaid) which did the bare minimum for my health. Not to mention it had zero dental coverage at a time when I was going to college with teeth quite literally rotting out of my head, broken down to the gums and with occasional abscesses. And that's only because my parent's combined income was effectively $0, because neither of them could work due to severe disability. You can look at the income limits [1] and see that you basically have to be living in abject poverty in order to qualify. So I'd advise you to actually experience it before telling others to read about it. [1] https://www.hca.wa.gov/health-care-services-supports/apple-health-medicaid-coverage/individual-adults https://www.hca.wa.gov/health-care-services-supports/apple-h...
  - volkadav 7y ago
    since when is being a poor kid trying to get an education a lack of responsibility? if anything, folks like that have more than enough on their plates without a bunch of jerks -- of any political leaning -- kicking down at them as they try to build a better life for themselves and their families. to your point down-thread, student aid packages tend to lift you over the very low threshold of medicaid eligibility last i knew. if you think being broke enough to be on medicaid or qualifying for need-based aid is easy street, you are waaaaaaay off base.
4NDR10D 7y ago
Thats the gist. The main problem is the lack of distinction between finincial aid or graduate fellowships and other forms of "unearned income". This lack of distinction leads to a graduate student's only source of income (a fellowship) being taxed as if it was a gift handed down by a rich parent.
- briandear 7y ago
  It is a gift handed down by a rich parent — the parent in this case is the university. There is no difference. Someone is handing you thousands of dollars and they say: “here is some money for your school, in order to keep getting this money, you have to get good grades and volunteer as a teaching assistant.” How is that any different than a rich parent giving you the same money with the same conditions? At the end of the day, some benefactor is handing you a pile of money to get an advanced degree.
  - ForHackernews 7y ago
    Graduate students work to earn their keep. They are more properly treated as employees: https://www.npr.org/sections/thetwo-way/2016/08/23/491090762/nlrb-rules-graduate-students-are-employees-with-the-right-to-unionize https://www.npr.org/sections/thetwo-way/2016/08/23/491090762...
  - simple_phrases 7y ago
    Are you telling me you have a hard time discerning between a trust fund and an educational grant or stipend?
    - briandear 7y ago
      From a taxation perspective, yes. If it’s earned income, then the university should put the “student” on a W2 and pay then as such. Otherwise, it’s unearned income and I mean “unearned” in terms of tax treatment; that doesn’t imply that it isn’t deserved. A day trader makes unearned income, but nobody could argue that doing that isn’t “work.” But the IRS still considers that also unearned. I am all in favor of cutting taxes on unearned income. However ironically, those most opposed to that also like to complain when it’s their unearned income being taxed as in the case of a stipend or fellowship.
deleted 7y ago
[deleted]

So the problem is that all unearned income that isn't for tuition is being taxed the same, regardless of who it's coming from and who it's going to? Am I reading it right?

RIMR 7y ago

No, the problem is that all the unearned income is being taxed at a prohibitively high rate, regardless of whether or not it is being used for tuition, regardless of where it coming from, and regardless of who is receiving it. The rate they are using was established specifically to discourage wealthy people from exploiting tax laws to reduce their tax burdens. Now it is being used to discourage low-income students from accepting financial aid. It honestly seems perfectly in-line with the Republican agenda: Reduce low-income people's access to higher education, and bastardize an anti-tax-avoidance law so that they can excuse the subsequent repeal of said law at the benefit of tax-dodging autocrats.

Vaslo 7y ago
I mean it’s crazy. God forbid they contribute toward the free health care they get until 26-the nerve of those evil republicans and their responsibility nonsense
- RIMR 7y ago
  Who the hell is getting "free health care" until they're 26? If you come from a low-income family, there's a damn good chance you're uninsured.
  - Vaslo 7y ago
    They have something called Medicaid, you should go read about it before you fall for the NYT agenda. It’s the people in the middle that get screwed, and it’s not just a republican issue
    - seppin 7y ago
      > It’s the people in the middle that get screwed Medicaid doesn't cover even a majority of lower income or younger Americans.
    - fzeroracer 7y ago
      I don't know about you, but I grew up dirt poor and on Apple Health (WA's version of Medicaid) which did the bare minimum for my health. Not to mention it had zero dental coverage at a time when I was going to college with teeth quite literally rotting out of my head, broken down to the gums and with occasional abscesses. And that's only because my parent's combined income was effectively $0, because neither of them could work due to severe disability. You can look at the income limits [1] and see that you basically have to be living in abject poverty in order to qualify. So I'd advise you to actually experience it before telling others to read about it. [1] https://www.hca.wa.gov/health-care-services-supports/apple-health-medicaid-coverage/individual-adults https://www.hca.wa.gov/health-care-services-supports/apple-h...
- volkadav 7y ago
  since when is being a poor kid trying to get an education a lack of responsibility? if anything, folks like that have more than enough on their plates without a bunch of jerks -- of any political leaning -- kicking down at them as they try to build a better life for themselves and their families. to your point down-thread, student aid packages tend to lift you over the very low threshold of medicaid eligibility last i knew. if you think being broke enough to be on medicaid or qualifying for need-based aid is easy street, you are waaaaaaay off base.

4NDR10D 7y ago

Thats the gist. The main problem is the lack of distinction between finincial aid or graduate fellowships and other forms of "unearned income". This lack of distinction leads to a graduate student's only source of income (a fellowship) being taxed as if it was a gift handed down by a rich parent.

briandear 7y ago
It is a gift handed down by a rich parent — the parent in this case is the university. There is no difference. Someone is handing you thousands of dollars and they say: “here is some money for your school, in order to keep getting this money, you have to get good grades and volunteer as a teaching assistant.” How is that any different than a rich parent giving you the same money with the same conditions? At the end of the day, some benefactor is handing you a pile of money to get an advanced degree.
- ForHackernews 7y ago
  Graduate students work to earn their keep. They are more properly treated as employees: https://www.npr.org/sections/thetwo-way/2016/08/23/491090762/nlrb-rules-graduate-students-are-employees-with-the-right-to-unionize https://www.npr.org/sections/thetwo-way/2016/08/23/491090762...
- simple_phrases 7y ago
  Are you telling me you have a hard time discerning between a trust fund and an educational grant or stipend?
  - briandear 7y ago
    From a taxation perspective, yes. If it’s earned income, then the university should put the “student” on a W2 and pay then as such. Otherwise, it’s unearned income and I mean “unearned” in terms of tax treatment; that doesn’t imply that it isn’t deserved. A day trader makes unearned income, but nobody could argue that doing that isn’t “work.” But the IRS still considers that also unearned. I am all in favor of cutting taxes on unearned income. However ironically, those most opposed to that also like to complain when it’s their unearned income being taxed as in the case of a stipend or fellowship.

deleted 7y ago

[deleted]