Why the “graduate student tax” being considered by Congress is an awful idea

FSU graduate student Brittany Fuzia decided while she was still in high school that she wanted to be a research physicist.

Brittany’s family had moved from school to school in different parts of the nation. Finally she graduated from East Islip High School on Long Island and became the first in her family to attend college by attending Valdosta State University, where she completed a bachelor’s degree in physics. Then Brittany joined FSU’s world-class astrophysics program to perform her dissertation research and complete the pursuit of her dream.

Now it appears there may be a new and unexpected obstacle for Brittany and other aspiring researchers like her – a tripling of her tax bill resulting from the mammoth tax package now being considered by Congress.

To pay her rent and buy groceries, Brittany receives an assistantship from FSU. This semester, she served as a teaching assistant in the university’s studio physics program, teaching undergraduates who aspire to be engineers, scientists and computer professionals.

If all of the hours that Brittany spends working on her teaching and research are accounted for, she makes only about a dollar per hour more than minimum wage. She already pays the same federal income tax that any other individual making the same wage pays. That is not the problem.

The problem is that a proposal being considered by Congress would tax Brittany for money she never sees – the “tuition waiver” that the university uses to account for Brittany’s research work.

Brittany is a graduate student, so FSU must process a tuition payment for her academic credits – even though she takes no classes. But because she is a teaching assistant, Brittany’s tuition “payment” is simply a transfer from one university account to another – the so-called “tuition waiver”.

The proposal being considered by Congress would require Brittany to pay income tax on that tuition waiver.

Other graduate students who serve as full-time researchers – and whose tuition is paid by federal grants – are in the same predicament.

Like everybody else, graduate students need food and a warm, dry place to sleep. Their assistantships provide just enough to cover that. Taxing Brittany several thousand more dollars per year for income she doesn’t even receive might make it impossible for her to meet living expenses and might force her out of her doctoral program just short of her dream of earning a Ph.D.

The nation’s economy is a big winner when Brittany and other students like her earn Ph.D.’s in fields like physics. About one-third of new Ph.D. graduates in physics join the private sector economy as powerful innovators in fields like computing and materials science. Others pursue research careers at universities and national laboratories, developing technological tools that spin off into the broader economy.

The bottom line is that allowing Brittany to achieve her dream of a Ph.D. in physics is good for Florida and good for the nation. Making it impossible for her to continue through an inexplicable change to the tax code makes no sense for anyone.

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