The first, and most obvious, is that both the House bill, which passed last week, and the Senate bill would raise taxes on tens of millions of middle-class and low-income households by the end of the decade, according to several analyses of the bills.
The second reason is subtler, but perhaps equally significant. To pay for a permanent tax cut on corporations, the plan raises taxes on colleges and college students, which is part of a broader Republican war on higher education in the U.S. This is a big deal, because in the last half-century, the most important long-term driver of wage growth has arguably been college.
The House bill would reduce benefits for higher education by more than $60 billion in the coming decade. It would shock graduate students with sudden tax increases, punish student debtors, and force schools to raise tuition at a time when higher education already feels unaffordable for many students. On balance, the GOP plan would encourage large corporations to invest in new machines in the workplace, while discouraging American workers from investing in themselves.
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The most dramatic attack on higher education in the GOP House bill is its tax on tuition waivers. This may sound arcane to non–graduate students, but it’s a huge deal. Nearly 150,000 graduate students, many of whom represent the future of scientific and academic research, don’t pay tuition in exchange for teaching classes or doing other work at university. The GOP tax plan would treat their unpaid tuition as income. So imagine you are a graduate student earning $30,000 from your school for teaching, while attending a $50,000 program. Under current law, your taxable income is $30,000. Under the GOP tax plan, your taxable income is $80,000. Your tax bill could quadruple. (The provision is not in the latest Senate version of the bill.)