I. If Republican Tax Plan Undermines Graduate Education, MIT Needs to Protect Our Graduate Students
II. Effects of Trump/Republican Budget on Research
I. If Republican Tax Plan Undermines Graduate Education,
MIT Needs to Protect Our Graduate Students
The Tax Cuts and Jobs Act recently passed by the House of Representatives treats tuition waivers to graduate students as taxable income (by eliminating Section 117(d)(5) of the Internal Revenue code). Paying this tax will sharply lower the actual income and standard of living of the ~80,000 graduate students nationally who receive such waivers, including the 7,000 graduate students at MIT. Graduate students constitute the future of the U.S. scientific and technology communities.
The Senate bill lacks this provision, but it is difficult to predict what will come out of the Conference Committee, which will resolve House and Senate differences. Research universities and national scientific societies have, of course, mobilized in opposition to this provision of the House version of the tax legislation.
MIT needs to prepare for the worst and plan to do what we can to protect our graduate student population. The biggest single expense for our students is housing. Taxing their tuition remission will reduce their income by many thousands of dollars, putting local market rate housing out of range. If the tax bill includes the House provision we recommend that MIT help subsidize graduate student housing.
The Graduate Student Council has documented the shortage of affordable graduate student housing (see their letter on page 17). The Graduate Student Apartments Now group cogently presented the need for MIT to provide 1800 affordable units in public testimony before the October 12 Ordnance Committee of the Cambridge City Council <http://web.mit.edu/fnl/volume/302/gsan.pdf>. The recent response of the MIT administration in offering to build 900 units of affordable housing was a step in the right direction, but still leaves thousands of graduate students dependent upon expensive market rate housing. MIT has the land, the financial resources, and the motivation to provide affordable housing for all our graduate students. The administration and its building committees, and the Planning Committee, established two years ago by vote of the Faculty, should begin immediately to make such plans.
Both the House and Senate plans are deeply inequitable, delivering tax advantages to top earners and corporations, and very little to those most in need of relief. A good summary is in Prof. Jeffrey Sach’s Op-ed in the November 28 Boston Globe. According to the Congressional Budget Office, for instance, Americans making less than $30,000 in 2019 will pay $2,580,000,000 more in taxes – while those making over $200,000 will pay $118,550,000,000 less in taxes in 2019 <https://www.sandersinstitute.com/blog/congressional-budget-office-cost-estimate-the-tax-cuts-and-jobs-act>.
Now is the time to call or write your Representatives and Senators calling for a more equitable tax bill and for keeping tuition waivers off the income tax rolls.
II. Effects of Trump/Republican Budget On Research
The concern over the impact of the income tax bills has distracted attention from the potential damaging impact of the Trump/Republican federal budget proposal. Trump’s budget cut $57 billion from the science programs such as DOE, NIH, and EPA, as well as the State Department, and other civilian programs in order to increase the military budget by that amount. That brought Pentagon budgets to about 55% of the total $1.15 trillion Congressional discretionary budget.
However, subsequently the Senate Armed Service Committee, chaired by John McCain, through the National Defense Authorization Act for FY18, authorized an increase of $80 billion, providing more than $700 billion in total for the Pentagon. This would result in more than 60% of our income tax dollars going to Pentagon accounts. Half of this would be for weapons purchases, the majority of which go to a few dozen large corporations. A third of that amount ~$100 billion, goes to the top five contractors – Lockheed Martin, Boeing, Northrop Grumman, Raytheon, and General Dynamics. Though such appropriations would certainly ensure defense industry profitability, this would be at the cost of civilian investment in transportation, education, healthcare, basic and biomedical research, housing, sustainable energy programs, and environmental protection. All these cuts in essential programs follow the anti-science policies of the current administration.
For comparison, the NIH budget responding to all diseases afflicting our nation’s population is about $32 billion, and the national transportation budget about $28 billion. According to the alternate People’s Budget proposed by the Congressional Progressive Caucus, civilian investment, for example in national water and transportation infrastructure repair, generates far more jobs and economic growth than does refinement of sophisticated weapons systems.
If the Appropriations Committee follows this policy, with the tax cuts proposed in the Senate and House income tax bills, even greater cuts will occur in civilian programs. Some of the costs will no doubt be added to the national debt, but such deficit spending will be limited by Republican deficit critics. However, even if, for example, the 18% cut in the NIH budget included in the Trump budget were limited to perhaps half that, the impact on graduate students and postdoctoral employment would be serious.
The Budget Control Act of 2011 caps Pentagon spending at $549 billion, so the path to the new budget is very complex, with Democrats opposing raising the budget caps for the Pentagon, without also raising the caps for civilian investment.
National organizations advocating for housing, veterans health, public transit, public education, and environmental protection will all be pressing Congress to respond to these needs. We in the scientific community need to join forces with these natural allies, as we press for protecting investment in scientific research and in educating future generations of scientists, engineers, and scholars. This is the time to let your elected representatives know your views, and to encourage your professional societies to be proactive in representing your interests.