However, while reducing the corporate tax rate, a group will be severely hit by the tax reform bill. According to CNBC 16 American financial media reports, because the bill requires graduate students to pay tuition fees that have been reduced, if the bill comes into effect, the tax payment of American graduate students will increase by 3-4 times.
"The House of Representatives just voted to bankrupt graduate students," Eileen Luso, who studies neuroscience at MIT, wrote on June 5438+06. It is estimated that the bill will increase the burden on students and families by more than $76,543,850 billion in the next 65,438+00 years.
At present, the Senate has not yet voted on the tax reform bill. However, because different schools have different understandings of the provisions of the bill, its specific impact on graduate students remains to be seen.
"It's almost impossible to make a living"
Russo, a doctoral student at MIT, is trying to become a member of the American scientific elite. Besides doctoral studies, she and her classmates work 40-80 hours a week, some teaching students and some doing research in the laboratory. In return, they get an average of $33,000 in scholarships each year, and they can also reduce their tuition fees by about $50,000.
The bill passed by the House of Representatives will require tax relief for tuition fees. In other words, Luso will pay taxes on her total income of $83,000, even though her actual income is only $33,000. Luso estimates that this will increase her annual tax payable by at least $65,438+0,000.
"This will make it almost impossible to make a living, and only the richest students can afford a doctorate." Luso wrote in the The New York Times, "At present, the minority groups in colleges and universities are the hardest hit, and many students will almost certainly leave academia completely. This will greatly weaken the competitiveness of the United States. "
Harvard Crimson, the school newspaper of Harvard University, also published an editorial on June 5438+04, saying that Harvard will reduce the tuition fees of all doctoral students and some master students by about $45,000 a year, and many students will receive subsidies every year. According to the original policy, a graduate student who receives an annual allowance of $35,000 needs to pay $3,300 in taxes. However, once the tuition fee is reduced, the tax payable will increase to $65,438+200,000, which is about four times of the original.
The newspaper quoted Patrick Thomas, a law professor at the University of Notre Dame in the United States, as saying that Harvard and other private schools may be more affected than public schools, because private schools usually have higher tuition fees.
Yale Daily News 9 S9, the newspaper of Yale University, calculated that at present, graduate students only need to pay taxes according to the allowance at the rate of 15%, which is about $3,000 per year. If the tuition fee of $40,000 is reduced, the tax rate of graduate students will rise to 25%, and the annual tax payable will increase to about $8,500.
A Ph.D. student in astronomy at Yale University said that if the tax increases, he will either need to borrow money from the bank or give up his doctorate. He doesn't want to leave academia, but he also doesn't want to owe a pile of outstanding debts.
China students studying in the United States are involved in tax-free treatment.
At present, the prospect of tax reform in the Senate is still pending, and there are many gaps between the Senate version of the tax reform bill and the House of Representatives. The website of the American Chemical Society "Chemistry and Engineering News" reported in June 165438+ 10/4 that the Senate Royalty Reform Bill will retain most of the tax benefits for undergraduates and postgraduates, including not taxing tuition fees.
However, the Senate tax reform bill may still hurt higher education. The bill requires that if private schools have huge endowment funds, they should pay a tax of 1.4%, which will affect about 70 schools and collect about $2.5 billion in 10. In addition, many schools believe that the bill will increase the pressure of tax reduction in high-tax States and affect the state government's investment in public universities.
Marisu Coleman, President of the association of american universities, said that the Senate bill has already brought a burden to non-profit universities when reforming the outdated tax system in the United States.
It is not clear whether the Senate can pass the tax reform bill. Public trust. Com reported that although the Democratic Party is in the majority in the Senate, it is almost impossible for Democrats to vote for it, so they can only lose two votes in the party if they want to pass the tax reform bill. At present, two Republican senators have expressed concern or opposition to some of the contents of the bill, and most other Republican senators have not yet expressed their views on the draft tax reform law.
Many universities are still evaluating the impact of the tax reform bills of the Senate and the House of Representatives on graduate students. Emma Dench, Dean of the Graduate School of Harvard University, said in an email on the 9th that the school was "trying to understand" the impact of the proposal and shared students' concerns about the impact of graduate students.
Lynn Cooley, dean of Yale University, said in an email that if the bill comes into effect, it will increase students' expenses, and Yale University "strongly opposes" the relevant provisions. She did not explain the specific impact of the bill on graduate students, but said that the school is conducting research to find ways to maintain tax incentives.
Cornell University announced on the 6th that the tuition fee reduced by Cornell University for graduate students is a scholarship and will not be affected by the tax reform.
According to the website of the Education Section of the Chinese Embassy in the United States at 20 16, the Agreement between China and the United States for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion on Income came into effect on 1986, 1 1 and 2 1. Articles 19 and 20 of the agreement concern the tax exemption of China students in the United States, and China students can apply to the United States tax authorities for exemption from federal income tax accordingly.
According to the agreement, visiting scholars and visiting professors who have come to the United States for less than three years are not required to pay tax on their teaching and research income (only referring to federal tax, the same below). Article 20 points out that international students are not required to pay tax on their income as scholarships; If it belongs to personal labor income, you can deduct 5000 yuan from the total income and then calculate the federal tax. As for the income of teaching assistants (TA) and research assistants (RA), you can ask the local tax authorities when filing tax returns, and their answers will prevail.