Graduate students and University administrators are fighting against a proposed Republican tax bill that they say would have several serious negative impacts on the Stanford community.
There are several provisions in the bill that would directly affect Stanford and other institutions of higher education, including a 1.4 percent excise tax on yearly net investment earnings for University endowments. Stanford’s endowment provides resources to areas such as financial aid, fellowships and housing.
In addition, graduate students are especially concerned because the version of the bill that just passed the House proposes to cut a tax exemption for them. Currently, universities are able to grant students tuition waivers when they serve as research assistants or teaching assistants. However, the Senate bill preserves the education relief provision for graduate students and would not require them to pay income tax on tuition waivers.
Students in academic fellowships would also be affected, as the bill would make grants and funding students receive from universities taxed as compensation.
According to a report by Vetri Velan, a Ph.D student in Physics at UC Berkeley, both public and private universities would be affected, but private schools would possibly see greater impacts because tuition costs are often higher.
“We see strong evidence that a Ph.D. student at a public university would see their taxes go up by 30 to 60 percent,” Berkeley wrote, “and a student at a private university would see their taxes increase by a factor of two to four.”
But according to Alejandro Schuler, a Graduate Student Council (GSC) representative for the School of Medicine, it is difficult to predict the full-scale impacts of the tax plan.
“It’s really hard to say because the tax policy for graduate students is already fairly opaque,” Schuler said. “It’s hard to say who would be affected and who wouldn’t be affected,” he added later.
When President Marc Tessier-Lavigne addressed the Faculty Senate last week, he criticized policies included in the bill and acknowledged that that many members of the Stanford community, including faculty, staff and students had expressed concerns regarding the tax plan’s impact on the University.
“We’re aware and concerned about several provisions in the House bill that would adversely affect Stanford students, employees, mission and the higher education sector in general,” Tessier-Lavigne said. “These provisions are almost fully designed to raise revenue to offset tax reduction in other areas, rather than being grounded in sound policy rationales.”
Tessier-Lavigne also criticized the Republican bill for having having “no clear rationale” behind its repeal of the student loan interest tax break, which is currently available to undergraduate and graduate students, and for erecting barriers to improved higher education practices and growth of institutions.
“It’s very unfortunate that such provisions are in contrary to what should be our shared national goals of increasing accessibility and affordability for students, advancing important research to develop cures and solutions to our nation’s and the world’s problems and furthering our education mission,” he said.
At the meeting, Tessier-Lavigne also spoke out against the provisions in the bill that would eliminate deductibles for state and local income taxes and limit the deductibles for property taxes.
“In states like California, where as we all know, citizens are already facing very high housing costs, this will exacerbate an already challenging circumstance,” Tessier-Lavigne said. “I don’t think I have to tell any of us that such a problem is extremely acute here.”
On Nov. 8, Vice Provost for Graduate Education Patricia Gumport sent a letter to all graduate students informing them that Stanford was working against the bill and encouraging students to call their congressional representatives.
In response to the threats posed by the tax bill, graduate students at Stanford have hosted a phone bank, launched a door-knocking campaign around campus, published a petition and sent a resolution to Provost Persis Drell and Vice Provost Gumport.
According to Schuler, the opposition to the tax plan has sparked a collaborative movement among graduate students.
“One of the great things about this is that graduate students are becoming activated because they see how this impacts them directly and in such an obvious way,” Schuler said.
Schuler added that efforts by graduate students are extending beyond helping people at Stanford.
“They’re being motivated to go out and support people in other communities who are also going to be impacted by this,” Schuler said.
The resolution the GSC submitted to Drell and Gumport asks the University to conduct a study to learn which students would actually be impacted by the bill.
At the Faculty Senate meeting, Tessier-Lavigne highlighted actions that Stanford is already taking to combat the current tax bill, including contacting Congressional leadership and coordinating with other universities across the country.
“I want to ensure our campus community that we’re taking this extremely seriously. We are working extremely hard, both directly and in concert with our peer institutions,” Tessier-Lavigne said. “But these are very perilous times.”
In a statement to The Daily, Gumport echoed Tessier-Lavigne’s statements.
“The key messages for our students are that our University leaders consider this highest priority,” Gumport wrote. “We are actively engaged in direct contact with members of Congress as well as collaborating with other universities and with higher education associations, such as the AAU [American Association of Universities] and ACE [American Council on Education].”
Tessier-Lavigne expressed hope that continued collaborative efforts could see instrumental changes to the bill.
“There are many other organizations who have come out in opposition to the bill as well. I think everyone needs to understand that the House’s proposed tax reform bill is just the beginning of the legislative process,” Tessier-Lavigne said. “Even as we speak, provisions are changing. It’s a very fluid legislative environment.”
Schuler expressed the wish that University administration would include students in their action plan and hopes the administration will be more transparent about what specific policies are being discussed to help graduate students.
“[The administration can] communicate how best, if at all, graduate students can integrate their advocacy,” Schuler said, giving the example of the University “targeting particular members of Congress.”
Still, Tessier-Lavigne said that these are only the first meetings and statements. Action will continue.
“We will be working hard to try to avert what could really be very deleterious impacts on our institution,” Tessier-Lavigne said.
Contact Sophie Stuber at sstuber8 ‘at’ stanford.edu.