People would not normally call me a fiscally responsible individual — not because I am poor at budgeting, but more because I am rather lackadaisical about my exact finances. For this reason, I am hardly ever the one to talk about taxes or other financial situations, and that is why this column should be something worth paying attention to.
Currently in the House of Representatives, there is a tax overhaul plan being debated. While I do not know many of the specifics (as I said, I normally am not the most up to financial news), there are parts of this bill that are very concerning for me personally and these have major implications for American society.
To begin to explain what is so concerning, let me explain my situation. I am currently a first year Ph.D, student studying aerospace engineering. As with almost all STEM related Ph.D. students across the country, my $50,000-plus tuition has been waived and I receive a stipend between $20-30 thousand a year in return for being a teaching assistant and for the research that I do. Under the current tax codes, this waived tuition is non-taxable and therefore, I am only taxed on the stipend that is designed to cover living costs.
This new bill though, will change my situation by making the waived tuition a taxable “income.” I, and thousands of other Ph.D. students across the country will all of a sudden be taxed for up to $80,000 of income on no more than $30,000 or actual income. That will nearly double the taxes we would be forced to pay in the best interpretation of the current bill, but the situation could be worse than that.
Personally, I am confident that Notre Dame would find some loophole so as to not put its Ph.D. students under additional financial burden, although I don’t know if peers at other universities will be so lucky. But regardless of whether or not my personal financial situation stays the same or gets worse, this part of the tax reform bill indicates a worrisome thought process among lawmakers.
Nearly 60 percent of graduate students that would be directly affected by this bill are pursuing topics in science, technology, engineering and math. These fields of study are widely accepted as necessary for invigorating the economy and keeping “America on Top.” In fact, in a 2014 Pew Research study, 92 percent of scientists said that the scientific achievements in the United States are the “Best in the world/Above Average.” Unfortunately, this new tax bill could change this. Given the fact that most Ph.D. candidates are coming from undergraduate institutions where they likely incurred a substantial student debt, this new financial strain associated with pursuing a higher degree may no longer be appealing.
Regardless, the U.S. will likely continue as a world STEM research leader, but deterring students from pursuing these higher degrees only will end up limiting the potential growth of scientific advancement within the U.S., which to me is bonkers.
