There are a lot of evil things in the tax “reform” bill just passed by the Republican-controlled House, but the evilest may be the plan to tax graduate students’ tuition waivers as income. If this provision becomes law, it will wreck innovation, our economy, and what little is left of the “American Dream.”
PhD students are like apprentices. They are students and employees of their departments. In the sciences, they often work on teams, in a lab, under the supervision of a research professor who acts as adviser and mentor. As students, they should have to pay tuition; as employees, they receive a stipend. Most universities are able to waive the tuition (which in many cases is greater than the stipend itself). Right now graduate students pay taxes on their stipends. They do not pay taxes on their tuition waivers because no money is given to them. The GOP wants to change that. They want to count those tuition waivers as income.
What this means is that a graduate student in the sciences, who receives a stipend of $20,000/year at a university that charges $20,000/year in tuition will have to pay taxes on $40,000. Her tax burden will double. In cases where the tuition is greater than the stipend, the tax burden will go up by even more.
This measure will make advanced higher learning unattainable for all but the children of the affluent. It will sap the economy of the higher earnings people with PhDs would make. It will harm companies who need that level of talent. And it will harm industry as a whole by keeping scientists from doing the research that drives innovation.
Republicans like to think that business drives innovation. It does not, at least not on its own. Some of the greatest breakthroughs happen in the labs that PhD students staff.
People who go into PhD programs have an intense, almost neurotic curiosity. Industry needs that. It needs someone who is obsessed with protein receptor sites to publish her work, which gets read by a team leader at a pharmaceutical company, and leads to the next great antiviral medication. Understanding breeds new ideas, which lead to breakthroughs. Necessity is not the mother of invention. Nerds are.
Take the example of Alexander Fleming. Most of us know the story of how he accidentally discovered penicillin in 1928. We may not know that he did not think it could be used as a medicine. Fleming was not a mold expert. That obsession fell to an Oxford scientist 10 years later. He was reviewing a stack of published articles, came across Fleming’s findings, and figured he could succeed where Fleming failed. His team eventually had the idea to irradiate the penicillium mold to create a variety that produced 1,000 times more penicillin than the mold Fleming was working with. (Click here for the full story.)
Breakthroughs like that can only happen in university labs because in business every dollar risked has to be justified by the predicted return, but innovations are, by definition, unpredictable. It is hard to imagine a 1940s businessman agreeing to purchase an X-ray machine for a scientist who wants to create mutant mold.
I do not know the exact details of how that Oxford scientist came across Fleming’s article. I do know that often the job of going through the library stacks falls to doctoral students. People who run labs do not have that kind of time. Lead scientists need labor, and that labor is graduate students.
By now, many readers will have noticed the letters behind my own name. I have survived a graduate program. My doctorate is in theological studies. I believe in the humanities, but I have focused on the sciences because there is little dispute about their necessity and because that particular model of graduate learning is more analogous to people’s experiences.
I have graduated; I do not have a “dog in this race,” as it were, but I do work closely with some of the people this tax bill would harm. When I was in grad school, I taught college-level classes to gifted students in the summers. I later became an administrator in that program. My job is a bit like being an assistant dean of faculty. I help PhD students and professors design courses like the ones I taught, only in their own disciplines. So I have lots of conversations with very smart, well-educated people. I talk with nanoengineers who are manipulating plant proteins to making cheap solar power; I talk with biochemists who are trying to cure diabetes; I hear immunologists tell me about their breakthrough research in the human microbiome. These people amaze me. Our world is richer for them. The thought of a world without their contributions terrifies me, as it should all of us.
Make no mistake! This measure has nothing to do with raising revenue. PhD students are mostly penniless. How much more do the House Republicans think they can wrest from young adults whose main staples are caffeine and ramen?
It is hard not to interpret this measure as yet another maneuver in the GOP’s ongoing war against higher education. The Pew Research Center has identified a growing trend for more educated people to be less likely to vote Republican. Perhaps some in the House care more about their short-term reelection prospects than the long-term health of this country.
Maybe instead of pursuing tax policies that keep people ignorant, House Republicans should just stop doing ignorant things.
Then again, what do I know? I’m just an over-educated academic.