The Washington PostDemocracy Dies in Darkness

Why you should be worried about Congress trying to tax graduate students

Holiday lights frame Cobb Gate at the University of Chicago. (Joel Wintermantle)

David Nirenberg is executive vice provost at the University of Chicago.

A provision in the tax bill that the U.S. House of Representatives recently passed — and that the Senate is still considering — would impose a potentially enormous tax increase on graduate students: as much as a 300 percent tax hike in some cases.

Senate rushes tax bill forward, but Republicans split over key details

If you are not a graduate student, why should you care?  Because although you may not know it, graduate students are a foundation of American economic, scientific and cultural strength, and they lie at the center of the nation’s most powerful engine of discovery in all fields.  If Congress wants tax reform to stimulate the economy, this provision would have the opposite effect.

The importance of graduate students to American and global prosperity may not be household news, but it should be.  The vast expansion of innovation and discovery that began in the United States with World War II was made possible by a national policy that made our research universities the envy of the world, attracting young researchers to the United States from across the globe in a great “brain drain,” as it’s been called.

(Full disclosure: my parents were part of this
“drain,” coming to the United States to study mathematics in the 1960s.)

The discoveries and creations of these graduate students underpin many of the innovations we take for granted, from the airplanes we fly in to the drugs we take when sick and the smartphone you may be reading this on.

Whether we are interested in health sciences or computing, in art history or economics, the discoveries that move us have all been shaped by graduate student hands.

Why aren’t the enormous contributions of graduate students more widely known, not only to policymakers but also to all of us who benefit from their important work in our everyday lives?

Research universities have not done a very good job of explaining the importance of graduate education to society, emphasizing instead the place of undergraduate education.  If the tax bill threatened to tax financial aid for college rather than graduate students, I suspect we would see much more widespread news coverage.

Put simply, graduate education is essential to the deep exploration of ideas that could one day benefit humanity. Private enterprise may be good at many things, but it is not set up to make the long-term investments necessary to train people who can pursue basic research on complex questions with distant time horizons and uncertain payoffs.  For three-quarters of a century, our society has designated that vital task to research universities.

To that end, our universities and our nation (through government organizations such as the National Institutes of Health) invest heavily in providing financial support to graduate students so they can carry out that work for the benefit of society.  A major research university may invest $400,000 or more for each graduate student, through financial support including tuition scholarships and stipends.

The House tax bill seeks to tax students for this support that we provide to the next generation of researchers.

One way in which research universities subsidize the vital mission of basic research is by granting a scholarship to graduate students for their tuition or waiving it.

The House bill would treat that grant as income, taxing some doctoral students, for example, as if they earned $70,000 or $80,000, rather than the $25,000 or $30,000 they may actually receive to support themselves.

One graduate student writer, writing for Inside Higher Ed, likened it to “taxing a coupon.” But whatever the metaphor, there is no doubt that if the tax provision becomes law, it will make it more difficult for young innovators to pursue research and impose a stifling effect on discovery.

The innovations that have created our health and prosperity today were built on the research of yesterday’s graduate students.  Today’s graduate students are making the discoveries of tomorrow.

As I write, a PhD student a few hundred yards from me is pondering how to make electrons float on superfluid helium, pursuing the next breakthrough in quantum computing. Another is evaluating the effects of social media on adolescent mental health. Still another is poring over thousands of pages in Korean, contributing to our understanding of conflict in the region.

The proposed tax policy will make such pursuits more difficult.  Discoveries may still be made, knowledge will still grow, but less of that will take place in the United States.

In a few weeks, I fly to China to celebrate the 100-year anniversary of the first PhD granted by Beijing University.  Chinese policymakers understand that graduate research warrants celebration and investment.  So should ours.

Those of us in academia may need to do a better job of explaining why our research is so vital to the health, prosperity, and happiness of our society.  But in the meantime, if Congress really wants to strengthen our economy and advance our quality of life, it should strip this and other research-killing provisions from its tax proposals and look for ways to invest more in the graduate students whose research does so much to improve our world.