GOP Tax Plan Could Hurt Students, NDD Programs

November 14, 2017 | Congressional News

Several provisions contained in the tax plans rolled out by Republican leadership this month have raised concerns for stakeholder groups that do not normally weigh in on tax policy. The House’s plan, the Tax Cuts and Jobs Act (H.R. 1) was approved by the Ways and Means Committee on November 9 and is expected to be debated on the House floor later this week. The Senate Finance Committee began its markup of the Senate plan on Monday and will continue its consideration of the bill today. There are significant differences between the two plans that would need to be worked out during the conference process, and the Senate plan will likely require additional changes in order to gain the support of 51 Republicans. However, Congressional Republicans are facing substantial political pressure to pass a tax plan, and GOP leadership has publicly stated that it hopes to have a plan passed by the end of the year.

Higher education groups have flagged a number of provisions in both proposals that could make undergraduate and graduate education harder to afford and affect colleges and universities’ ability to offer assistance to their students. Of particular concern is a proposal in the House plan to tax graduate tuition waivers as income—meaning that some graduate students’ taxes could increase by 100 percent or more while they earn the same (generally limited) income. The House bill would also eliminate the student loan interest deduction as well as several other tax credits for students. While these changes are absent from the Senate bill, the two proposals share other provisions that could affect colleges and universities’ bottom lines, including reducing incentives for charitable giving, an excise tax on endowment earnings at private college and universities, and repealing or reducing the state and local tax deduction, potentially affecting state funding of higher education.

In addition to the impacts on students and higher education institutions, the budget proposals add an estimated $1.5 trillion over ten years to the federal deficit, likely leading to significant cuts to non-defense discretionary (NDD) programs down the road, which include research funding. Given that these programs have already seen disproportionate cuts to their budgets in recent years, this is a cause for concern among groups focused on science and research, as well as on other social issues.

COSSA has not issued its own action alert on the tax plan, however we have compiled the following list of resources and information on how to take action prepared by partner organizations:

American Association for the Advancement of Science

American Council on Education