Taxing the American Dream

What does it mean when the best of our next and future generations will be deprived of gaining a hope for securing a masters degree or going for an advanced science degree or seeking a medical school education which will be much needed skills in the years ahead?

The American education system has been the gold standard for training our – and the world’s – future leaders in science, government, teaching and a host of other fields that are central to maintaining our exceptionalism. However, the new tax legislation under final consideration by the U.S. Congress appears to be a direct assault on any hopes of keeping that reputation alive for the future.

In his recent article for Medium, Graham Glusman of Columbia University notes that “college access has expanded dramatically in the past 75 years, enabling students from middle and low-income families to attend college.

This has largely been the result of federal programs and scholarships that were designed to do just that, such as the Pell Grant. In 1976, there were 1.9 million Pell Grant recipients, receiving $6.2 billion worth of financial aid. In 2012, that number had increased to 9.4 million recipients, who received nearly $40 billion in aid. As a result of heightened accessibility, the United States is one of the most educated countries in the world, which has had a reciprocal effect on Americans’ incomes and on the economy at large. On average, people with a bachelor’s degree make 66 percent more than those without them.”

The current tax proposal before Congress represents an assault on securing greater accessibility for undergrads. Worse, it is an outright effort to make it nearly impossible for graduate students from lower and middle income families from seeking advanced degrees – masters, doctoral and professional – by taxing their tuition waivers. Consider the following example cited in the article:

“if a student seeking a medical degree and making $2,000 a year part time at a coffee shop also received $30,000 a year from a university to help with tuition, that student’s taxable income would be $32,000. The absurdity of the proposal is that a student, who presumably takes on a job to help pay for basic necessities like food, heating, and rent, would have to pay taxes as if their earned income were 16 times higher than it actually is."

“In 2017, the federal tax on $32,000 was $2,763.75, more money than the student actually made at the coffee shop in the first place. What makes this plan so nonsensical is that the student never actually sees the $30,000 waiver; it is immediately deducted from their tuition, the rest of which they are still required to pay. So not only would students who received such waivers be in immediate debt simply for attending graduate programs, they would still have to pay the rest of the tuition that their waiver didn’t cover.”

What is the purpose of tax legislation that is punitive to those trying to gain a brighter future for themselves through education? What does it mean when the best of our next and future generations will be deprived of gaining a hope for securing a masters degree or going for an advanced science degree or seeking a medical school education which will be much needed skills in the years ahead?

Is this the kind of country that America should hold itself out as offering to its citizens? Do the voters even understand that their children and grandchildren’s opportunities have been frustrated by tax legislation that makes it near impossible for them to secure what used to be an inalienable right for all?

Please let me have your comments on this latest development. More importantly, reach out and let your Congressperson know that this is downright foolish as well as unfair.