December 13, 2017

LETTER TO THE EDITOR: On the grad tax in the GOP tax plan

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To the Editor:

In the upcoming days, individuals from the House of Representatives and the Senate will head to a conference committee to resolve the differences between the two competing Republican tax plans and craft a final piece of tax legislation for the President to sign into law. Currently, provisions in the House bill would cripple graduate education in the United States. We are writing to explain why these proposed changes would devastate the graduate student community at Cornell and to express our frustration with current narratives being used by academic institutions, including Cornell, to defend graduate students and workers.

At Cornell, most PhD students receive a tuition-waiver,* meaning that we are charged tuition for our studies, which the University then turns around and pays in full. This is presumably because we provide a service to the university, much in the same way that we would be unable to complete our research without Cornell’s resources — a justification used for the intellectual property agreement we sign with the university upon matriculating. Essentially, Cornell would be unable to fulfil its teaching and research missions without our labor, which is, in the words of our university President Martha Pollack “essential to Cornell’s excellence in research and education.” Under current tax law, this tuition waiver is not taxed as part of our income, which makes sense since none of us ever see a cent of this amount that the university essentially pays to itself.

“The grad tax,” a provision of the House version of the tax bill, seeks to change this by counting tuition waivers for graduate students as taxable income. What does this mean for a graduate student at Cornell? Let’s say you’re a PhD student in English teaching a first-year writing seminar in the fall and the spring. Counting a summer stipend and the annual Student Health Insurance Plan premium, your taxable income for the year is about $33,700. Now, if we add the waived tuition for just the fall and spring semesters, that adds $29,500 to your “income.” So you will actually take home $31,000 per year, but you will be taxed as if you made $64,200. Lena Bartell, a Cornell Ph.D. candidate in applied physics, recently compiled a visualization highlighting the impact of “The Grad Tax” across different peer institutions.

grad tax plan

Disclaimer: Tax calculations were made based on a single, individual tax filer with standard deduction and personal exemption. Calculations for the current tax code were made based on 2017 tax brackets published by the IRS. Calculations for the House tax plan H.R.1 were made based on rates published in this Business Insider article ( Graduate stipend rates were estimated from data collected from university websites for the most recent calendar year available. To estimate tax after the repeal, published graduate tuition rates were included as taxable income (in addition to the stipend). The purpose of this graphic is to assess the potential impact of the H.R. 1 bill on graduate students in the United States who receive nontaxable tuition waivers from their universities. This should NOT be used to calculate personal estimated income taxes and/or for official use.


With 24 percent of our graduate income now going to pay taxes, students may find it increasingly difficult to support themselves. Rising housing costs make it increasingly difficult for graduate students, like non-Cornell working-class residents of the city, to live in Ithaca. A 2016 Graduate and Professional Student Assembly survey found that 25 percent of graduate and professional students reported some level of food insecurity. Over 100 currently enrolled graduate students support spouses and children with this stipend. The reality is that “the grad tax” will make it incredibly difficult for Cornell graduate students to make rent, pay bills and simply feed themselves.

This would be an immediate hardship on currently enrolled graduate students, and would in the future discourage all but the wealthy and privileged from attending graduate school. In practice, this would disproportionately hurt students of color, first-generation college students, those from the working class, supporting families, or who already shoulder debt, and other so-called non-traditional students, directing potential students away from graduate schools across the country. As such, this policy would effectively close off graduate education to all but the wealthiest students who could independently support their study. All graduate students should oppose this grad tax, and should pressure their representatives in Congress to oppose the striking of section 117(d) from the tax code. We have compiled a list of all House representatives on the conference committee, their phone numbers, and a blank call sheet for any student that wishes to call their representatives.

But we cannot stop there. Graduate students need to recognize “The Grad Tax” as embedded in a systemic attack on higher education and on labor power in the U.S., and we thus need to reject any rhetoric that might divide those of us here at Cornell from being in solidarity with our colleagues across the country.

In the days following the circulation of news of “The Grad Tax,” the Cornell Graduate School began publicly articulating that, because the Graduate School treats us like “students” rather than “workers” and thus files our tuition waivers under 117(a-c) and not 117(d), we will not be affected by the proposed change in policy in the House bill. Setting aside for the moment that there are a number of legitimate reasons to doubt Cornell’s projection of absolute certainty of the simplicity of this matter, we must reject any sophistry that attempts to paint organized labor as an enemy and our “student” status as a safe-haven.

There are three things to keep in mind regarding this line of rhetoric from the Cornell Graduate School.

First, we are workers under the current NLRB. That may change once Trump’s new appointees take their seats soon, but as of now we are workers, regardless of how any administrators think of us or our labor.

Second, tax law and labor law are distinct, so even if we were to form a collective bargaining unit as unionized laborers — which is our decision, for or against, alone — that would be distinct from our tax status; whether the school calls us students or workers (which is a false dichotomy) has literally nothing to do with how we are taxed.

And third, if we are to organize effectively against this grad tax, we must do so from a position of political solidarity with our fellow grads across the country, the larger labor movement in general, and the majority of Americans whose interests are not served by the overall GOP tax bill. If our action is to be effective, our analysis must be wider than a rigid focus on our own paychecks as Cornell grads — as important as that is! We recognize that the attempt to categorize us as “safe” because we are students and not workers is a wrench against labor solidarity.

We recognize that the grad tax is not unrelated to the repeal of the Affordable Care Act mandate, which the Congressional Budget Office predicts could leave up to 13 million more people uninsured. We recognize that by making graduate school financially inaccessible to all but the wealthy few, “The Grad Tax” is part of a network of policy decisions which would skew American society even more in favor of the rich and wealthy over the poor, working-class, and even middle class than it already is.

Therefore, our fight against this tax is also a fight for our rights as laborers. It is a fight for the larger graduate student labor movement happening across the country. It is a fight for the poor and working-class people whose lives this tax bill will endanger in order to provide tax cuts to the richest among us. It is a fight for a country whose policies recognize the immediate danger of climate change as hurricanes and wildfires devastate communities across our nation’s lands, rather than one in which tax codes open up protected Alaskan land to further fossil fuel exploitation. It is a fight for the preservation of Medicare and social security, which will surely be cut in the aftermath of the GOP tax bill.

The fight against the grad tax is a fight for a more materially just society. Let’s all labor for that vision.

Jesse A. Goldberg, grad
member, Cornell Graduate Students United Steering Committee, and chief, Cornell Graduate and Professional Student Assembly Humanities Division

Ethan Ritz, grad
on behalf of the Cornell Graduate Students United Organizing Committee

Manisha Munasinghe, grad
executive vice-president, Graduate and Professional Student Assembly  

Nicholas Carre, J.D. Candidate
co-chair, Graduate and Professional Students Assembly Student Advocacy Committee

Sophia Rocco, grad


*some graduate students who receive tuition remission have their tuition paid by external fellowships, which is a different situation from the majority of those who are charged by the university and then paid a waiver by the university.