Fighting Against the Proposed Graduate Tax

Republican Tax Bill

In mid-November 2017, the House voted to pass a tax reform bill - the Tax Cuts and Jobs Act - would have had many adverse effects on higher education. One of these was the repeal of Section 117 (d) which currently allows institutions like Johns Hopkins to provide tax-free tuition waivers or reimbursements at the undergraduate level to employees, their spouses, and dependents. Moreover, it also allows tax-free tuition of individuals employed as graduate teachers and researchers. If Section 117 (d) were to be repealed, graduate students would have their tuition waivers taxed. This means that a graduate student who earned a $25,000 salary with a $50,000 tuition waiver would be taxed as though they took home a $75,000 salary. Under the House version of the tax bill, this means that graduate students would spend nearly half of their $25,000 income on taxes. Graduate education would become unaffordable to many students, forcing many to drop out and making academia an even more classist institution.

Response from JHU

As graduate students became aware of the severe impact the proposed bill would have on their lives, JHU administration at no point provided assurances that graduate students would be protected. In two emails addressed to all graduate students, administrators promised to update us about the status of the bill, and claimed that the university was standing in "strenuous opposition" to the bill. Despite growing calls for the university to openly discuss concrete steps it would take to protect graduate students if the bill were passed, no further commitments were forthcoming.

A natural question asked by many immediately following the proposal to make tuition taxable was: Why not make tuition $0? In reality, most PhD students at JHU already pay $0 in tuition. The waived tuition is an arbitrary amount decided by the university, and paid by the university to itself. If tuition were reduced to $0, the threat posed to graduate students by the repeal of Section 117 (d) would be extinguished immediately. Yet, it turns out that the university stands to lose quite significantly without this phantom tuition. The university has always generated revenue by including graduate student tuition as part of grants it receives from external parties, including taxpayer-funded agencies like NASA and the NHS. Furthermore, some PhD students, mainly at the Bloomberg School of Public Health or in the later stages of their programs, do indeed pay exorbitant sums in tuition. By making tuition $0, the university would lose this income that goes straight into the university's coffers as "overheads". Instead of committing to protecting graduate students who do essential work for the university, JHU chose to protect its bottom line.

The reluctance of JHU to take more decisive action throughout this episode highlights the unique vulnerability of graduate teachers and researchers under the university's employment. Vice-Dean Matthew Roller, in a meeting with graduate students on December 11, said that JHU would respond to the loss of tuition revenues by reducing graduate student funding. Such statements admit a sobering reality. A university that, in 2016, sat on a 3.81 billion dollar endowment and generated over 98 million dollars in operating profits would gut its lowest paid employees when threatened with fiscal losses.

Speak Out

Angered by the tax bill's threats to higher education and frustrated by the university's inadequate responses, graduate students at Johns Hopkins had to act. In addition to endorsing and circulating the Graduate Representative Organization's (GRO) petition against the tax bill, TRU organized a speak-out for December 7. More than 75 people turned out to listen as members of TRU, as well as a member of the undergraduate organization Students for a Democratic Society (SDS), condemned the bill's potential affects on graduate students' ability to continue working in the university and its ramifications for higher education as a whole.

Following the speak-out, a smaller group organized a collective call-in to government representatives. More than 155 calls were made, demanding that the final Republican tax bill did not include a repeal of the tuition tax waiver.

Even if Section 117 (d) is not repealed in the final tax bill, some among us continue to pay large sums in tuition. TRU will continue to call for the remission of these fees, and continue to work toward more secure working conditions for graduate teachers and researchers.

To read more about these actions in an article from the JHU News-Letter, click the link below. Read more