[Infowarrior] - Fwd: Princeton grad student explains impact of GOP tax plan on higher ed

[Richard Forno]

>> Date: Mon, 6 Nov 2017 07:20:26 -0500
>> From: Rich Kulawiec <rsk at gsp.org>
>> Subject: Princeton grad student explains impact of GOP tax plan on higher ed
>> 
>> [ This analysis is from David Walsh, who is a PhD student at Princeton. ---rsk ]
>> 
>> 	So I broke down my tax bill under Trump's "Cut Cut Cut" proposal.
>> 	My taxes won't be cut. My tax bill will quadruple.
>> 
>> 	Let me walk you through it. I'm a graduate student at
>> 	Princeton--my (generous) stipend is $32,500. (Some of my STEM
>> 	colleagues make more.)
>> 
>> 	For simplicity's sake, I'm just going to use HR Block's income
>> 	tax calculator. It's not perfect, but it'll give a good ballpark.
>> 	Without deductions, my tax bill is $2,849 on their calculator,
>> 	which is close enough to my actual tax bill, so let's use that
>> 	as a benchmark.
>> 
>> 	Right now, tuition support is not counted toward one's
>> 	gross income for tax purposes. The new GOP bill would strike
>> 	that exemption.  Princeton's tuition is--including health
>> 	insurance--$48,940.
>> 
>> 	So, my actual gross income would be $81,440. Let's plug that
>> 	into the HR Block tax calculator!
>> 
>> 	Lo and behold, my estimated tax bill jumps to $13,499.	That's by
>> 	no means an unreasonable federal tax bill for someone making
>> 	$80,000, but bear in mind my *actual* income is $32,500.
>> 	My actual rate jumps from 9% to 41% of my real income.
>> 
>> 	My net income drops from $29,651 to $19,001.  In effect, I
>> 	lose $10,000.
>> 
>> 	This same basic tax breakdown applies--in broad strokes--to every
>> 	single one of my colleagues at Princeton, in every department.
>> 
>> 	Let's have even more fund with HR Block! I have colleagues who
>> 	are married with children. Let's say your spouse makes, say
>> 	$50k a year.  Joint income is $82,500. Assuming no deductions,
>> 	with two school-aged children, the tax bill is $5,108 for the
>> 	household.  Throw in the tuition support, and joint income is
>> 	$131,400. Estimated tax bill jumps to $16,213--an increase of
>> 	over $10,000.
>> 
>> 	It's the same basic breakdown as with my single-earner situation,
>> 	albeit less dramatic: bill jumps from 6% of income to 20%.
>> 
>> 	This will be the case at every funded PhD program in the country.
>> 
>> 	Those of us who aren't independently wealthy *survive* on our
>> 	stipends. I've tried to be as fiscally responsible as possible.
>> 	My rent is cheap, I save as much as I can every month, I drive
>> 	a used car (a Honda--very reliable).  I even started a certain
>> 	% of my savings into an index fund for retirement, especially
>> 	because, as a grad student, I don't get a 401(k).  If my tax
>> 	bill goes up by $10,000... I really don't know what I would
>> 	do. At the minimum, goodbye savings! (At the *minimum.*)
>> 
>> 	I can't think of a better way to destroy higher education in
>> 	this country. Which--let's be clear--is absolutely the point of
>> 	this bill.
> 
> ----- End forwarded message -----