Higher Education Devalued Under Trump/GOP Tax BillDecember 10, 2017 |
The message is clear on tax reform.
If you’re connected to a college in any way, be that as a student, worker, official, you name it—tax reform has come at your expense.
You better hit up the corporations and the wealthy for money during the next fund-raising drive, because they got all the breaks on taxes and should have some money to kick back to you.
That’s one way “trickle down” is supposed to work.
Of course, both the House and Senate bills repealed the 80 percent deduction for donations to universities on things like seats in a preferred section of the stadium or arena.
Watch them shrink.
The truth is anything connected to higher ed got the shaft in this massive legislation that the GOP is jamming through Congress.
What’s in the bill isn’t as important to Republicans as Donald Trump’s autograph by year’s end.
Experts say the legislation is fraught with loopholes, with known loopholes replaced by even bigger loopholes. It makes the tax code even more susceptible to lawyers gaming the system in the name of “tax avoidance.”
“The more you read, the more you go, ‘Holy Crap, what’s this,” Greg Jenner, a former top tax official in the George W. Bush’s administration told Politico. “We will be dealing with unintended consequences for months to come because the bill is moving too fast.”
But the Republicans and Trump need a victory, and it seems to come at higher ed’s expense.
One vaguely written item is the tax on private university endowments. Apparently, there’s no clear definition of what’s an endowment, or what accounts should be taxed. The tax of 1.4 percent on investment income seems focused on 100 of the wealthiest private institutions.
But that could mean funds that normally go to scholarships to increase diversity might be diverted to pay for this rushed piece of legislation.
Score one for politics.
Another change involves the ability for nonprofits, including universities, to issue tax-free bonds.
The Senate didn’t change it, but the House eliminated the exemption and a traditional way to raise revenue.
How do schools make up for that? Congress doesn’t care.
The biggest line item may be student loan interest. Currently deductible, the Senate left it alone. But a House bill did away with the deduction to get $21 billion in revenue.
Great. But we’re taxing graduates after college when they can least afford to pay the money back. Will we see more defaults?
At least they’ve added that if you die or become disabled (maybe from the tax code falling on you), your loan will be forgiven.
Grad students have even more reason to gripe. Unlike the breaks the wealthy get, the traditional perks of free or reduced tuition and stipends will be taxed according to the House bill. So would free tuition to spouses or children of university employees. Once again, the Senate wasn’t as Grinch-like as the House. But you can see how higher ed or our budding scholars were treated here.
And it’s likely they’ll pass on the cost in terms of higher tuition and fees, and reduced benefits to employees.
Universities are already notorious for low pay, and have usually made up the difference in benefits like education costs to their employees. But the House has cut out the $5,250 per year credit to raise $20.6 billion over the next ten years.
That should be a morale booster on campus workplaces.
There’s still time to change the numbers during the reconciliation process. But as it stands, higher ed is down for a hit of more than $71 billion, according to Steven Bloom of the American Council on Education.
Like everything from diversity to public access to health care, education just isn’t a big deal in a Trump administration.
This is no way to “Make America Great Again.”
Trump has dumbed down the presidency and now is taking aim on the country. Every day he leaves Americans numb as he embarks on the process.
In a Trump America, higher ed is a devalued option in a country being remade to advantage the corporate rich.
Emil Guillermo is a journalist and commentator. He writes for the civil rights group AALDEF at http://www.aaldef.org/blog