University Pushes Back on Proposed Tax Cuts and Jobs Act in Letter

By Duane Paul Murphy 

The Catholic University of America has commented its disapproval of the latest provisions of the Republicans’ proposed tax reform bill in Congress that will impact both undergraduate and graduate student in higher education nationwide. An email was sent out by the University’s Office of the President on November 16th.

In the email, President John Garvey listed the potential provisions contained in H.R. 1, The Tax Cuts and Jobs Act, as well as the proposed Senate version of the bill that would likely lead to critical budgetary cut measures impacting college students.

The provisions in the Senate’s version of the tax reform legislation include the elimination of the taxpayer’s’ ability to claim a tax deduction for college-age dependents and the advance refunding bonds that are used to refinance outstanding debt at lower interest rates. The Senate version of the bill would also impose an excise tax of 1.4% on investment income from endowments of some private institutions.

The House version of the bill would tax graduate students engaged in teaching or research on the value of tuition reductions and eliminate the current Lifetime Learning Credit that is available to nontraditional students, graduate students, and many working professionals. Under the House version of the bill, the Student Loan Interest Deduction in which an individual with income up to $80,000 can deduct up to $2,500 in student loan interest will be repealed. It will also eliminate private activity bonds that are low cost tax-exempt bonds used to finance capital projects.

“I hope our efforts will temper the enthusiasm for the proposed changes, some of which would be very consequential for private higher education,” said Garvey, who currently serves as Chairman of the Board of the Consortium of Universities of the Washington Metropolitan Area.

Undergraduate students on campus have been critical of how the proposed tax reform bill in Congress can impact the financial costs for those studying in college.

“A reform that further penalizes students who pursue higher education to pay for a fifteen point corporate tax cut and repealing the estate tax reflects poorly on our values,” said junior politics major Vincent Ottomanelli.

Graduate students on Catholic’s campus have also highlighted concerns about several provisions in the proposed federal legislation. One PhD candidate expressed worries about how graduate students will pay more in income taxes if their tuition, stipends, and fees waived by the university are taxed at higher rates. The candidate also worried that it will discourage people from obtaining a higher education since the modern economy demands highly educated, highly skilled workers.

On Tuesday, December 5th, graduate student protesters on Capitol Hill demonstrated against the provisions. Walkouts at Duke University in North Carolina, Harvard University and the University of Southern California in Los Angeles have also occurred this week. Proposed tax reform has recently passed the Republican majority Senate and now goes into a conference committee with the Republican majority House of Representatives to reconcile or compromise both versions of the bill. According to a recent Harvard-Harris public opinion poll, 54% of Americans surveyed disapprove the bill, including 56% of non-partisan independent voters.