Against a 61% Tax Increase on Berkeley Students

Currently, when graduate students work as teaching assistants, the university waives their tuition and pays them a stipend. Under current tax law, students pay income tax “only” on their stipend. A provision in the tax bill currently under consideration would count the waived tuition as income, on which the student would have to pay taxes as well.

A calculation by a Berkeley physics graduate student (source) finds that a student who work as TA for both semesters and the summer, is payed at “step 1” of the UC Berkeley salary scale, and is a California resident, currently pays ​$2,229 in federal income tax, which would become ​$3,641​ under the proposed tax plan, a 61% increase. The situation for EECS students is a bit different: they are paid at a higher scale, which puts them in a higher bracket, and they are often on a F1 visa, which means that they pay the much-higher non-resident tuition, so they would be a lot worse off (on the other hand, they usually TA at most one semester per year). The same calculation for MIT students shows a 240% tax increase. A different calculation (sorry, no link available) shows a 144% increase for a Berkeley EECS student on a F! visa.

This is one of the tax increases that go to fund the abolition of the estate tax for estates worth more than $10.9 million, a reduction in corporate tax rates, a reduction in high-income tax rates, and other benefits for multi-millionaires.

There is also a vox explainer, and articles in inside higher ed and the chronicle of higher education with more information.

If you are a US Citizen, and if you think that graduate students should not pay for the estate tax of eight-figure estates, you should let you representative know. Usually calling, and asking to speak with the staffer responsible for tax policy, is much better than emailing or sending a physical mail. You can find the phone numbers of your representatives here.

If you have any pull in ACM, this is the kind of matter on which they might want to make a factual statement about the consequences for US computer science education, as they did at the time of the travel ban.

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The end of UC Berkeley as we know it

There are two qualities that together make UC Berkeley unique among worldwide institutions of higher education.

One is that our several academic departments cover nearly all fields of scholarship, and that nearly every department is at the very top of its field. Very few places have this phenomenal combination of breadth and depth, although, admittedly, there are some.

The other is the diversity of the student body. Not ethnic diversity, because the passage of Proposition 209 made black and (to a lesser extent) Latino students almost disappear from campus. But, at least, UC Berkeley has been an engine of upward social mobility for a lot (and, being a big campus, it is really a lot) of white and Asian Californians from middle and working class families. To be sure, the top East Coast private universities do admit several students who are not from privileged families, and they do provide generous financial aid, but one has to be off-the-charts brilliant to get in based on raw talent alone. The merely very smart students can get in only if they have the kind of expensive resume-padding extracurricular activities that are out of reach for most students. At Berkeley, the merely very smart student has a good chance to get in by simply doing well in high school. And then, tuition is low for everybody who is from California, and the state used to give additional grants (80% of tuition) to everybody with a 3.0 GPA; plus the UC system has its own financial aid program.

Two days ago, the Chancellor announced that because of the cuts expected as a consequence of the state-wide budget crisis, UC Berkeley needs to cut about $100 millions. Next year, we should expect a complete freeze on hiring, layoffs of administrative staff, strong cuts to student aid, increased tuition, and salary cuts of 8%. For 2010-2011, rumors are that the sun will go dark, it will rain blood from the sky, and then the locusts will come and eat us alive. Unfortunately, 2011-2012 will be much worse.