Low-Income College Students Are Being Taxed Like Trust-Fund Babies

May 17, 2019 · 392 comments
christine (scottsdale)
why do colleges give athletes full scholarships? yuck. give scholarships to kids who can do something more useful than throwing a ball. encourage something better in our children.
Margaret Jay (Sacramento, CA)
I don’t get it. Maybe I’m just too stupid to understand the higher economics of taxation of the non-rich, but why are scholarships and financial aid taxed at all? The first is about rewarding merit and the latter is about need. Except for filing to get a refund of taxes withheld from the wages of part-time jobs, students should be free of any involvement with the evil IRS.
realist (new york)
Another assault on education by the republicans. Even if you are poor and made it, they will try to bring you down. They have no shame.
Fred (Bryn Mawr)
The Progressives should refuse to bail the republicans out until the entirety of the Reagan, Bush and trump tax cuts are repealed. When this country had a truly great economy--right after WWII--the top tax rate on income above 80K was taxed at 94 percent. Let us in fairness return to that.
Fred (Bryn Mawr)
They too must pay their fair share. Think of all the Black, Brown and Red who live in penury so that these fortunate sons and daughters of America may be educated in the finest schools. Let us think of the true poor--the less fortunate without higher education.
ellie (Cambridge, MA)
And Trump pays nothing. Disgusting.
tim torkildson (utah)
". . . they need toothpaste and toothbrushes . . ." the great need today is toothpaste and toothbrushes for the mealy-mouthed
It’s not just the living stipends. Graduate school tuition waivers and awards are also taxed. So if a student pursuing a graduate degree receives a package that includes a $50,000 tuition waiver and a $20,00 living stipend they are taxed on $70,000. Should the student receive travel money for a research trip or an honorarium to speak at a conference, that is taxed as well. And unlike other taxpayers, students may not deduct their travel and research expenses. This is a powerful disincentive for our students to pursue graduate level studies and one that deserves our lawmakers’ immediate attention.
DSD (St. Louis)
So where are the Republicans shouting “lies” when yet again we find another tax hike on the middle and lower classes that they claimed didn’t exist?! The media always gives the Republicans a free pass on their lies and hypocrisy. Is anyone else sick of the media treating Republicans with kid gloves? Do we have to have a revolution to eliminate the corruption and dishonesty? Every Republican representative in Congress lied.
A2er (Ann Arbor, MI)
Taxes on a billionaire hedge funder: 19% Taxes on a college student: 37% Yup folks - we're now burning our seed corn. Along with the earth.
James (Citizen Of The World)
Education in other industrialized countries, consider education both K-12 and post secondary, and investment in the future. By the way, the student loan program was put in place to allow people of lesser means get a quality education. The Ivy League schools somehow felt left out and wanted a cut of that government money. Seems anywhere government money is involved, corporate America is there to get an outsized piece of it. Then banks told the government, we can lend tax payer money better than you can, for a percentage of course. We see that same scenario play out with flood insurance, we the people take on the flood risk because only the government can provide flood insurance cheaper than an insurance corporation, because after all, they calculate the risk, it’s right there on their risk tables, so the insurance for a 400K home would be astronomical. But, Allstate, bear no risk, but made 400 million dollars after hurricane Sandy, while denying people money to rebuild their homes, after all their percentage comes from how much money they save, so naturally they hide behind the “act of god” also known as “Force Majeure”.
Ben (Austin)
Makes you wonder what else is buried in that legislation. How many special interests got served on the backs of the middle class and lower middle class?
L (NY)
Nothing surprises me anymore when it comes to how Republicans prioritize the haves over the have-nots in our society. They measure worth in terms of wealth. It's a whole different world for those born from privilege who live in their insular surroundings like the Brett Kavanaughs and Donald Trumps of this nation; no wonder they have no understanding or empathy for those in need.
David Williams (Montpelier)
Vote Republican and this is what you get. Who could possibly be surprised.
DSD (St. Louis)
And yet Republicans love H1B visas on the grounds that we don’t have the educated people to fill the jobs. Republicans are the most dishonest class of people ever to assemble in the US.
Just Saying. (Hampton VA)
they love them because they can pay H1b visa holders less, AND the visa holders can't leave their jobs unless they are willing to leave the country. it's like having indentured servants.
simon simon (los angeles)
Trump’s 1st & only accomplishment: Trump & GOP gave $1.5 trillion tax cut to ultra wealthy while the poor working folks suffer.
Karen B. (The kense)
This is not litte known. I remember it being stated as a big concern when the so called tax reform was discussed. What a joke! It’s clearly another attempt of this admin to dumb down the population by making higher education unachievable.
Peter ERIKSON (San Francisco Bay Area)
When I went to college in the late 1970s, I remember tuition at San Francisco State being about $100. By 2011, it was about $5,500, and now it’s much higher. We’re ensuring that young and women will be shelling out a fortune for college, and that they will carry debt for years. What does Trump say about that? Yes, deafening silence.
David John (Columbus, Oh)
I went to San Francisco State in the mid-late 70s as well and I recall paying $150 a semester. UCLA law school was a similarly astounding $2000. Oh if I was a practical young person back then I would have saved myself a lot of money by going onto graduate school then. California of the 70s will never be the same.
cheerful dramatist (NYC)
Of course this was no accident. This world and it's benefits are only for the very rich. What serf needs to waste 4 years when they could be serving our oligarchs and get paid as little as possible? There will soon be mandatory crop picking and all jobs filled by the immigrants which Americans do not want to do, same low wages. I guess white serfs will be paid a little more and good looking ones used for private intimate services on demand. And the very bright? Well as they did in China during the days of the Revolution, they sent the brightest and the most educated to teach in grade school in back water towns. Shh hide it if you are intelligent. Some one commented here that the birthrate has hit a record low. Why would anyone want to bring child in this world since we will all be fried in 12 years, thanks to the fossil fuel industry and the politicians they bribe to stop green energy. Those crippled with college debt, low wages, no bargaining power and bad health care, no children for them. I expect there will be a lot of different sterilization methods employed. I am surprised Amazon or some other company hasn't been researching the home kit model for the public. I mean with safe abortions disappearing. Of course the rich are pushing for space travel, listen to Teddy Cruz plead us to outsmart the space pirates. And they will take the money from government scholarships for the poor of course. Vote for the candidates who will not take bribes.
Jane (Virginia)
Paul Ryan was in a big fat hurry because this was his only chance to give tax breaks to the ultra-rich and get his kick back.
msporter58 (Austin TX)
Who says it was unintended? Please stop making assumptions about the intent of this vile administration. Trump is ignorant but McConnell is not. He is evil but not ignorant. The results of the tax cut for big money were intended -- help the rich and beat up on everyone else.
Brendan (San Francisco)
This is insane and not an oversight, but a continued attack by Republicans to make the rich richer and keep everyone else down so they can have a slave class while they sail around on their yachts and private jets. And the title is incorrect - thanks to the new tax law, trust fund kids aren't paying taxes.
Frank Lopez (Yonkers, NY)
Surprise!!! That is a gift for the large number of young students who didn't bother to vote for Hillary cause "bernie or bust." I guess bust it is.
DSD (St. Louis)
Republicans hate everyone but the super rich. How does a Republican live with him/herself?
T1A (mclean)
"trust fund babies"? Why use this derogitory / class war term when a valid point is here to be made?
Angelus Ravenscroft (Los Angeles)
Why not? They can take it. They’re rich and they need to understand the consequences. It might help them empathize with the women their parents called “welfare queens.”
Lotus Blossom (NYC)
Thank you NYT, for covering this!
Just like climate, the future generations bear the cost.
Frank Lopez (Yonkers, NY)
Well, the American people wanted the Republicans to control all layers of government, so what were they expecting?
RMurphy (Bozeman)
At best, this is careless and what happens when you ram legislation through without proper drafting time and committee. At worst, this is shameful from the Republicans, and a disgusting tax hike on people looking to improve their lives.
Barry Short (Upper Saddle River, NJ)
@RMurphy. You're assuming that this was unintended.
DSD (St. Louis)
Why does the NYT headline claim that taxing educational assistance at the highest rate was an “unintended consequence” when it is clear that Republicans fully intended this as part of their assault on education.
Glenn (ambler PA)
That tax money was needed to provide tax relief to families like the Trumps! Make the Poor Pay!!!
John Leddy (Patchogue)
“Unintended” tax increase. Really...?
May Archer (NC)
"Unintended consequences!" My son-in-law brings in $12k/y as part of his master's degree fellowship. His wife works at a nonprofit in an entry level job (graduated from a public ivy). Republicans have taxed his $12k! Really?!? Come on, one month's mortgage payment for you = razor's edge for students. Back the heck off and correct this mistake, with a full refund of what you took from these poor kids.
Stefan (PA)
It’s a feature not a flaw according to the designers of the tax
jlc1 (nyc)
The headline is misleading. Trust fund babies, the wealthy, do not pay taxes at a 37 percent rate. They reserve such tax rates only for the "little people".
JRo (NJ)
It wasn't a mistake. The Republicans despise any money going to lower (non 1% ers) class. Just another hidden tax on regular people to offset tax cuts for millionaires and billionaires. Like the MTA overtime issues, they're labeled fraudsters and cheats while the wealthy lie, cheat and steal and it's just business as usual.
NineMuses (Provincetown, MA)
Republicans rammed through Trump's tax bill. The damages are coming home to roost, first of all in the massive deficit in the federal budget (which, no doubt, the Republicans will use as an excuse to say that spending on essential domestic programs must be cut), and second, in ridiculous errors that force Gold Star Families and college students to pay heavy taxes. Republicans must be voted out of the House, Senate, and White House. Their greed and sloppiness know no bounds.
A Goldstein (Portland)
Once again, the law of unintended consequences strikes. It rarely works in favor of the average citizen, especially when the laws are conceived in ignorance, greed and malfeasance.
Tamza (California)
@A Goldstein Seems to me tax legislation/ code should simply be based in previous year AGI. AND total elimination of ALL deductions, exemptions, exclusions, preferences, etc. Taxes are based from FIRST GROSS DOLLAR, starting at a rate of 1% up to $5k, then 2% etc and finally caps out at 75% over $5m. i ‘recall’ a situation where a piece of legislation was written to specifically apply to ONE college in Texas, and the college name was misspelled - so they had to put through an amendment.
wdb (the Perimeter)
It's not just college non-tuition loan money. I created UTMA's for my granddaughters a few years back, and now the oldest is going off to college. Guess what she needs to deal with when dipping into the UTMA to help with college costs? You guessed it. Apparently my granddaughters were born with silver spoons in their mouths -- even though there's not a speck of the stuff in any of our homes. Thanks Trump!
Tamza (California)
@wdb actually UTMA are NOT good. [And i have my question about IRAs/401k’s too]. They are figured as ‘wealth’ for the child, and affect financial aid. If the same $ had been in a parents’ name only a small portion is factored in to the fin aid calculations.
Purple Patriot (Denver)
I doubt this was unintended. The GOP wants to punish the sons and daughters of the non-rich who pursue higher education. Educated citizens are less gullible and republican political viability depends on the gullibility of voters.
American Akita Team (St Louis)
This kind of issue and the insane desire to treat women as chattel through punitive abortion laws will undue any tail wind the GOP may have with the economy in 2020. How can any moderate or Blue Dog Democrat vote for any GOP candidate who supports taxing scholarships and grants of the young women in college while GOP on the flip side also seeks to deny such young women access to contraception, planned parenthood and abortion such that their risk of poverty due to an inability to pursue educational opportunities due to unplanned pregnancies raises as fast as their tax bills. I used to be a Republican before Trump, but no more. Women are not chattel without equal rights and students who already are being punished with tuition raises at 3.6 time the CPI-U should not be the GOP whipping boy. Any party which promotes treating my daughters as second class citizens can simply go you know where. Just when it looked like Trump might peel off enough Jewish voters in FL, PA, OH, MO and WI to possibly get re-elected, he and his party go and shoot themselves in the head with attempts to disenfranchise my daughters. All I can say is that Omar and AOC are not enough to overcome the powerful social head winds the GOP has created for themselves.
Tamza (California)
@American Akita Team Try talking with some of the base! Their ONLY interest is on 1 issue - abortion, Israel, Iran, military spending, China. Whatever. Democrats are ‘idealistic’ - if a candidate is not aligned on ALL matters dems oppose or sit out. Wasn't that the position some ‘leading voice’ [Sarandon or ??] took - and diverted enough votes away from Clinton.
PJR (Greer, SC)
Nice of the GOP to nail talented students with a ridiculous tax bill so the uber wealthy could get a tax break so as to afford $91M chrome bunny sculptures.
Susan J (New York)
Hmm Republicans plead ignorance? Really? It was reported at the time they rushed the tax bill through. Perhaps Fox News missed it. But NYT definitely reported that this was in the bill.
Jonscott Williams (Arizona)
I wonder which states will be the first to criminalize disposal of a used condom?
Barry Short (Upper Saddle River, NJ)
@Jonscott Williams. Wait until they criminalize use of a condom in the first place.
WATSON (Maryland)
This was by design. A war against the poor and especially against the poor who would seek to pull themselves up and out of poverty. But that is the cost of having our 1 percenters being billionaires instead of just millionaires. Rigged is inadequate to describe our capitalism unhinged.
Chickpea (California)
Sloppy legislation written by incompetent Republican legislators. In brief breaks between appointing unqualified judges, it was amateur hour for writing tax law. Of course there are unintended consequences, Republicans ignored all analysis by the CBO. But the real issue is that even if Republicans could do better, they honestly don’t care enough to bother. Vote them all out or suffer more of the same.
Michael Tyndall (San Francisco)
Well, someone has to subsidize the tax cuts for millionaires and billionaires. And of course we should tax that which we want less of. Namely, educated citizens.
Life-long Yankee (California)
Another Trump and Republican "gift" to the wealthiest and hardship to those who need the scholarships and student financial aid loans the most. "Republicans now say they did not anticipate that it would raise taxes on low-income scholarship winners." Yeah... right...
Julie W. (New Jersey)
How about this. The students can borrow large amounts of money to invest in badly managed real estate projects. They can then write down their losses to offset their tax liabilities. Per our President, it's very legal and very cool.
Tamza (California)
@Julie W. But ‘student loans’ cannot be wiped in bankruptcy etc. However IF a student was smart enough to take out a ‘normal’ loan, ..,,,,
Baltimore 16 (Adrian MI)
This article keeps referring to “unintended consequences.” I don’t think they were unintended at all. They hurt low income students, a large proportion of which, per the article, come from minority groups. They make it more difficult for young people to get an education, which is terrific for Trumpists who “love the uneducated.”
Alan (Sydney Australia)
It's a little disturbing to me that folks seem to think this was an error of some sort. It favours the wealthy and suppresses the ordinary students. It is Republican 101 people!
R (New York)
Generally speaking, the right has been attacking higher education for some time. This may have been done intentionally. Most Republicans think higher education is bad for America (Pew Research). But, even if it wasn't intentional, these taxes might continue as a serendipitous outcome for the right since colleges and universities are the bastions of the "liberal elites."
Alex Fraser (Suffield,CT)
Another example of Trump’s Tax Plan hurting individuals. Shame on the Republicans who rushed this through, most like without reading or understanding what they were reading, and void of any solid independent analysis. Let’s hope that Congress will correct this and refund the excessive taxes accrued/paid.
Bear in mind this is also money the students never actually see. It’s all handled in the background; it’s not like it’s income and can be “spent”—it’s strictly singular purpose is paying for people to be able to stay in school. So really this could be taken as an affront on education as a whole. Take the case of graduate students, for example: these are people who really want to be there and contribute to the knowledge base that differentiates us modern folk from cavemen. We wouldn’t be so far beyond the warlike Romans or the Huns or the Visigoths without hundreds of years of academia that got us to where we are now! Academics already have a hard enough time getting funding and this just really kicks ‘em while they’re down. It’s so much worse for undergraduates on financial aid. I’d really like to think that we’re smart enough as a society to be able to break out of historical cycles and learn from our past instead of repeating the same mistakes over and over again. Evidently many politicians/aides/policy-pushers think otherwise; maybe they should take an economic policy history class.
J (Denver)
This isn't an "unintended side-effect"... it was always meant to cost everyone more so the rich can make more money. Low-income college students are part of that "everyone"... always were... the "low-income" part should have been a dead giveaway that they would be negatively affected by the cash grab tax legislation.
Jim Pechur (Lansing)
Little known fact is that the standard deduction, for a taxpayer of any age, and who may be claimed as a dependent on parent(s)' return, calculation includes as "earned income" the taxable portion of any scholarship (total amount awarded net of amounts used for "educational expenses"). For 2018, that taxpayer will have a standard deduction of the amount of that taxable portion up to $12,000. Therefore, most (if not all) of the taxable income will be sheltered from tax (citing the stat in the article of the amount of room and board).
Ed Marth (St Charles)
If a company buys new equipment to improve manufacturing the cost is written off. So isn't the cost of borrowing for that equipment. Taxing money borrowed to make a person better in the marketplace, or, just a better citizen, should not be taxed as income. In the mountain of bad idea from the Trump administration, this has to be near the top.
Jackson (Virginia)
@Ed Marth So a gift of thousands of dollars should be free?
Andrew Ross (Denver CO)
“Historically, after major tax legislation, the longstanding practice has been to correct drafting errors and other technical issues on a bipartisan basis,” Mr. Grassley said... Same with any other legislation, but did Republicans come to the table to improve the Affordable Care Act? Grassley has abandoned any pretense of bipartisanship in his actions, and should expect Democrats to extract big concessions for their co-operation on helping the Republicans fix the harmful errors of this hastily passed legislation.
GUANNA (New England)
@Andrew Ross People pointed out this outrage before the vote was passed, The GOP didn't care and they still don't.
Mark Kantrowitz (Chicago, IL)
The proper solution is to repeal the tax on scholarships. Scholarships are the only form of generosity that are treated as taxable income to the beneficiary. If you give money to a soup kitchen or homeless shelter, the recipient is not taxed. But, if you give a scholarship to cover a low-income college student's room and board or other expenses (other than tuition and textbooks), it is treated as taxable. If Congress wants to make college more affordable, they should stop taxing scholarships and student aid.
BlackJackJacques (Washington DC)
@Mark Kantrowitz The Republicans have no interest in making college more affordable, or even facilitating education. Their agenda is to promote more ignorance as a means of cultivating more future Republicans.
GUANNA (New England)
@Mark Kantrowitz The dollars thrown at god's plethora of useless churches and more useless preachers is not taxed.
Mystery Lits (somewhere)
Progressives: "We need more taxes to fund more entitlement programs" Also Progressives: " Wait I have to pay the same taxes as everyone on the economic scale!!! Why can't we just stick it to the rich... everyone knows they are evil."
Chrissy (Richmond, VA)
Straw man: Also straw man:
Friendly (Earth)
@Mystery Lits The rich doesn’t need financial aid, they won’t be taxed. That’s the unfair part.
Casey (new york)
"Progressives: "We need more taxes to fund more entitlement programs" Also Progressives: " Wait I have to pay the same taxes as everyone on the economic scale!!! Why can't we just stick it to the rich... everyone knows they are evil."" You act like everyone pays the same effective percentage across the board. A student should not be paying the same taxes as a hedge fund manager. They especially shouldnt be paying the same taxes if they are low income, but gained a scholarship through merit, as that's basically a charitable donation to a student at that point. What is wrong with you that you see no problem with strangling out the people who already have the hardest time making ends meet?
Rocky (Seattle)
The Republicans talk about class warfare. But they exercise it. And their dodo counterparts across the aisle are either complicit or asleep at the switch.
AE (France)
Couldn't expect anything else from a country which actively seeks to keep its masses ignorant and low to the ground. Anything is justifiable to render them malleable and receptive to the war cries of a particularly evil individual such as John Bolton who attended Yale University on a free ride and avoided the draft. The rest of today's American youth will get dragged into their own Vietnam when the programmed war against Iran gets underway. So much can be accomplished with ignorant and uninformed minds !
Myrasgrandotter (Puget Sound)
Why are scholarships, student grants and military survivor benefits taxed at all? Oops, silly me, I forgot! The trumpublicans tax children to keep them squashed down in lifelong debt and poverty so the top 10% can keep their carried interest and other tax loopholes, and pay little or nothing on capital gains; so stable geniuses can avoid paying taxes at all. Ever increasing income inequality. That's what makes America great for power usurping sociopaths. Help a sane person register to vote, and dedicate a space of time in 2020 to get them to the ballot box.
Jean (Cleary)
The new Tax Reform bill had nothing to do to make the tax code simpler and if anyone believes that I have a bridge to sell you. If the goal was to simplify the tax code, than a flat tax, no loop holes would be the way to go. Let's call this what it is. A Reverse Robin Hood, rob from the poor to give to the rich.
Michael (Brooklyn)
“Senator Charles E. Grassley is working with his colleagues in the Senate and the House to address this issue as quickly as possible, according to a committee spokesman. ‘Historically, after major tax legislation, the longstanding practice has been to correct drafting errors and other technical issues on a bipartisan basis,’ Mr. Grassley said.” Oh, PLEASE! How on earth does the New York Times quote this man or any of his Republican colleagues as if they have a modicum of credibility to speak to bipartisanship — or, for that matter, to legislative craftwork? They were so hellbent on shoveling this sludge through the halls of Congress before Americans had a chance to read what was in their noxious, scandalously patched-up bill, and now they want to act like it was composed in good faith? Good grief, am I the only person who cannot believe what I’m reading?
Peter (New Haven)
Trump doesn't like poor people of any kind, whether they have talent or superior achievement or not. He was born with a silver spoon in his mouth and a trust fund to pillage at will; he will never care about anyone other than his rich cronies. And every Republican in Congress is one of his rich cronies, who all think like him. They operate out of spite and greed, because they know that they could never govern based on morality, progress or justice. It isn't in their blue blood.
James (Citizen Of The World)
Trump doesn’t like anyone of any kind, he proves that by throwing close associates under the bus. Except for Cohen, Cohen’s got the dirt, he knew what Trump was, so he did the smart thing, and saved documents. He worked for Trump for a decade as his attack dog, he knows how Trump runs his shady business, let’s face it, nothing Trump has ever done, his Vodka, his water, steaks, air line, USFL football team, and worst of all, he owned Casinos that couldn’t turn a profit while the Casio’s all around him did. If Trump and the republicans bankrupts the US, our standing in the world would be less than zero, currently we are at zero.
Shamrock (Westfield)
Another Republican raising taxes.
Wayne Doleski (Madison, WI)
That our country invests so little in our young people is simply awful, and the consequences are already playing out. Shame on us.
GUANNA (New England)
@Wayne Doleski Why do you think they want more highly educated immigrants. Imports are cheaper than domestic products.
NineMuses (Provincetown, MA)
@Wayne Doleski No. Shame on Republicans.
James (Citizen Of The World)
That’s right, and companies like Infosys are the worst, they facilitate the H-1B visa’s for high tech Indians can come here and take jobs. I live in Redmond Washington, home of Microsoft, Expedia, Salesforce.com, Google, just to name a few. I transfer busses right in the hub of high tech, and there has been a huge influx of Indians using the H1-B visa program to come here at the behest of these high tech companies and displace highly trained and skilled high tech workers. These numbers, and what companies are hiring these people is all on the government website. I went and looked, well over 100,000 high tech workers have been imported by high tech companies, because these people will accept lower pay. I’m not against the H-1B visa, or immigration for that matter, if that level of skills can’t be found, but that’s rarely the case.
Noel Thompson (Little Rock, Arkansas)
You guys should investigate how Americorps’ Members Siegal Awards are taxed.
Deirdre (New Jersey)
Taxing graduate students for scholarships and undergrads for room and board was a planned feature not mistake by republicans. This was another way to punish those who didn’t vote for him. He breathed dracarus on all of you - who ya gonna vote for now? He is not your president, he doesn’t work for you, he doesn’t care about you.
Martin (New York)
"In the past, a student from a household with a joint income of $50,000 who was awarded a scholarship that covered $11,500 in room and board would be taxed at their parents’ rate of 12 percent. Under the new law, that money would be taxed up to 35 percent." This is just false. Only the incremental ~$2,000 over $9,150 would be taxed at 35 percent.
GUANNA (New England)
@Martin Why are they taxed at all. Are churches taxed for the gifts they receive. Seems every two but religion is more important than the nations college students. Maybe it is time we tax religious contributions. The giver gets a tax break and the recipient doesn't pay taxes. shouldn't student be treated the same way churches are treated.
John (Florida)
Fight the problem not the people. I was disappointed to read many of the comments. They read like something I might have seen on Fox “news”. We the people are bigger than Republicans and Democrats. Decisive politics are not good for any of us. The first question should be how to fix and not who to blame.
James (Citizen Of The World)
That’s exactly right....
Sailor Sam (Bayville)
What makes people think that Trump and the GOP did not intend to stick it to poorer people who get student aid?
NewsReaper (Colorado)
As long as Amazon, Netflix and the rest of big business do not pay their share of taxes, the poor will continue to bear the burden of trying too sustain society, until the end which is just around the corner.
Carrie Davis (Denver)
I’m so tired. I don’t even know where to begin anymore to fight for the rights of my kids or anyone else. I’m exhausted with my own student loans that are difficult to pay because it is more expensive for me to work than it is to stay at home with my kids. Im exhausted that I have to worry about the safety of my children when I drop them off at preschool. I’m exhausted when I tell my sons that every human has value and our government continually undermines our LBGTQ, poor, POC, women, minority, immigrant neighbors. Im exhausted of telling my boys that voting is important when it feels like I don’t have a voice. I do not have it in me to tell them about the things our country can still be proud of because I don’t even know what that is anymore.
Teekins (Brooklyn)
@Carrie Davis Amen, sister. But hope, as they say, springs eternal... chin up. Your boys can fix things :)
Brian (Queens)
What's great about this is how easy it will be to have a perfect example of institutional racism for conversations and college lectures moving forward. Thanks Donald!
Pam (Alaska)
Are you sure it was unintended? Someone has to pay for the taxcuts for billionaires and corporations or the deficit would be even worse than the 2 trillion existing law is going to cost our children and grandchildren. And Republicans are afraid of education and educated people.
njglea (Seattle)
This article proves once again that there is simply no limit to the insatiable, demented greed of the 0.01%. They think it is their "right" to use their inherited/stolen wealth to manipulate OUR laws and systems to benefit themselves. Rather than participate in the democratic America that allowed them to amass such wealth they spend every minute trying to figure out how to wring even more out of the poorest and hardest working of us. This attack on 90% of us - designed by the 0.01% and supported by the next 9.9% - will only end when WE THE PEOPLE rise up and say NO. ENOUGH. WE must hire/elect Socially Conscious Women and men who will tax back all the wealth that has been stolen/inherited and is now being used to try to destroy OUR lives. BIG business, charities, foundations, trusts, etc must be broken up and taxed to the maximum to restore OUR Social Safety Net and true democracy for all - Social and Economic Equity. NOW is the time - before they can further destroy OUR lives and world,.
Nan (MN)
Sorry but someone earned the inherited wealth and passed it on to another. That's jealousy talking. No, I'm not wealthy.
Teekins (Brooklyn)
@Nan Point taken, but that wealth shouldn't afford them the influence over policy that they have.... Policy which, apparently, also predominantly affects you.
Roland Berger (Magog, Québec, Canada)
Everything is good to make a wider difference between the haves and the have-nots.
Alecfinn (Brooklyn NY)
So now we see another thing this Administration has inflicted on the general population. The much vaunted tax rollback has helped major corporations and the wealthy for the rest of us ( to be kind) not so much. We are witnessing the dismantling of our protections the federal government had to put in place because the folk who owned most businesses would not accept any responsibility for the general population or their employees causing massive suffering and deaths. Women's Healthcare is under attack (abortion rights) most of the attacks come from "Christian men" who believe the dogma. Men have no business in women's healthcare unless they are partners, to be clear I was born to war orphans of WW2 adopted at 2 months old. I know if abortion was legal then I might not be here but I firmly believe with the exception of partners women should have the same rights as men when it concerns healthcare. What is next to be attacked, Gay Rights, Women's Right to Vote, Voting Rights (oops that is already under attack), Equal Opportunity in employment renting or purchasing properties? Now this mess over scholarships for low income families? I am unnerved and appalled at what's happening. Sheesh!!!
Rick (Fairfield, CT)
This is one reason my kids will be encouraged to attend university in New Zealand By 2024, all three years of under grad tertiary tuition will be completely for Kiwi citizens and my kids are dual nationals
northeastsoccermum (northeast)
Most here aren't so lucky. In much of the world University is either free or entirely affordable. Here it's increasingly only for the affluent
alfred levine (csi)
Unreported, yes, but why is it being described as unintended?
DW from CT (Connecticut)
On a different note, the administration wants to shift money from Pell Grants to send NASA back to the moon: https://www.nytimes.com/aponline/2019/05/13/us/politics/ap-us-trump-nasa.html?searchResultPosition=2 They claim it is due to a drop in enrollment and because there is a surplus. Maybe there would be more participation if the grants actually covered more of the cost, instead a being just a drop in the bucket. Perhaps students are giving up because they just don't see any way to pay. Perhaps the minimum Pell Grant should be increased. Not everyone needs to go to college, but for those who are deserving, socioeconomic status shouldn't be the deciding factor.
T Norris (Florida)
You get the impression that the GOP was so busy cooking up tax dodges for the super-rich that they paid little or no attention as to how the rest of the bill would affect people of lesser means.
Wade (DC)
“Little noticed?” Are you kidding me? It was very clearly pointed out during the republican tax plan debate that this was an issue.
Ted (NY)
Once the new ruling class of “meritocrats” turned education into an industry, like much else in this country since 1970, it’s been downhill. Of course, the Forbes Billionaires lists these brand new “entrepreneurs” as the brand new billionaire class. Under Trump’s “immigration” scheme, foreigners who can afford to pay the ransom-like tuition cost will earn lots of “points”, and will be able to 1) get into the university that accepts their largesse - since it seems to be, not so much ability as, about how much the parents “donate” to its endowment , and 2) achieve the “American Dream”. Pity, native born Americans won’t be afforded the same opportunity.
Kilgore.Trout (USA)
Scrap the entire tax code and its loopholes for the wealthy elite. Set three fixed-rate brackets (10%, 15%, 20%) based on individual income levels. (Put corporations in the highest of the three.) No deductions, no loopholes, no special breaks for the governor's pals, etc..... Boom - problem solved.
S (East Coast)
Look, bottom line is young people have to vote in the numbers that older people vote in, otherwise the politicians are too short-sighted to concern themselves with these issues.
Louise (NY)
In the land of our corrupt pres and current administration, low income families are a tax payer burden and need to pay more for less while the wealthiest people need tax breaks.
Charles (WV)
So a kid's scholarship is taxable, but thanks to creative accounting Amazon and Apple pay no taxes. Sounds fair to me. Also anyone who remotely believes the tax code has been "simplified" is delusional.
Marge Keller (Midwest)
"Republicans now say they did not anticipate that it would raise taxes on low-income scholarship winners . . . Jesse A. Solis, a spokesman for the Republicans on the Ways and Means Committee, said that the 2017 tax law had achieved a long-sought goal of simplifying the tax code." What that indicates to me is either Republicans didn't bother to read the tax law bill or didn't understand the tax law bill, in either case, the alleged "simplifying of the tax code" was either a joke, a flat out lie or a flat out failure. And yet I recall the speed and urgency in which the GOP moved in order to get this bill approved, signed and passed. Any time something of such magnitude is done in quick hast is done to hide the many secrets that lie beneath the layers and layers of verbiage and barnyard bromide. Perhaps not all Republicans "anticipated" the tax law bill would raise taxes on low-income scholarship winners, but the Republicans who created and carved out this cruel and hurtful provision knew. Enough people knew and supported it and allowed it to happen. For Republicans to cry innocent and "I didn't know" is beyond insulting. It's criminal on so many levels.
Mark (Pittsburgh)
I guess the tax law had to be passed before we could find out what was in it.
Chris (Chicago)
It's only going to get worse until we all put our feet down and march. March in the streets and to the polls. This is how Trump and the Republican party wants to see us. Only to exist to support their rich handlers.
Jules (NY)
The administartion does not care. Polls show vast majority of Trumpers don't go to college.
Anne (Portland)
We are cannibalizing and gutting ourselves. Every day. In a variety of ways. The GOP loves this. But it's not sustainable. Nor is it humane.
Susan Wladaver-Morgan (Portland, OR)
This is not a bug or a glitch in the trump tax.. it’s an intentional feature, designed to narrow the educational and professional options of poor and middle class students. If it incidentally harms and undermines education too, that’s a bonus, as far as the GOP are concerned.
Who says that this was "unintended"? The 0.1%ers who benefit from the bill, and their GOP enablers, never cared where their tax benefits come from, as long as they are sustainable. The GOP tax bill was DESIGNED to make young people and the future suffer for the sake of today's wealthy.
Barbara8101 (Philadelphia PA)
The idea that this "error" was unintentional is ludicrous. Republicans hate higher education (actually, they hate all education) because educated people do not vote for Republicans. They snatch up any opportunity they can get to penalize people who either want, have, or are obtaining educations.
Rene Pedraza del Prado (New York. New York)
America defaulted on their promises to me. Hence, I’ve defaulted on their so called “loans”. See: chattel, company store slavery, banking abuses, stolen Earned Income Credit refunds (from my poverty level taxes on any given year) which they took to cover Ronald Reagan’s gift to the banks, obscene interest rates aimed specifically at defaulters. All members of the class that doesn’t have the privilege of printing its own endless supply of money. Corrupt liars, and abusers of the underpaid, overworked, and fed up. The wealthiest nation on Earth refusing to underwrite its most talented citizens, or is it subjects nowadays? Education should be free, especially to those who have real merit and scholarly success, not the vacuous product of celebrities paying their way in or submitting fraudulent applications of their “super star” vapid offspring. Most ironic of all is the fact that it was I who had to educate so many of my intellectually wanting professors, and a good number of the millennial “bubble babies” pretending to be students I had the displeasure of working alongside in that heady Amherst air, so full of the fatuous, and self-impressed I’m still awaiting my proper remuneration and reward for all that work. They will never see a red cent from me.
Frank F (Santa Monica, CA)
"Unintended" consequences? Surely you jest! Hosing the less fortunate is a kleptocrat core value.
common sense advocate (CT)
Correct this egregious, heartless and shortsighted mistake. At the ballot box. Vote blue 2020.
Marc Castle (New York)
This insane, criminal system of student loans is a result of pure corruption. Since the Reagan administration began to kill grants that middle and lower income students could get, and scholarships slowly disappeared, consequently loans ended up replacing them. As the student loans began to expand, and proliferate so did the corruption. Horrible, predatory companies like Sallie Mae (now Navient) and others, began to get Government contracts, and lots of power, in 1996 the bankruptcy option was eliminated. Student loan interest rates climbed, so the government and these predators make billions. Albert Lord, the ex CEO of Sallie Mae was making $30 to $40 million a year. The schools began to raise tuition, and their top adminitrators make hefty salaries. While students are saddled with huge debts. It's criminal, and immoral. Yet it continues, as the debts keep piling up.
Gary (Brooklyn)
First step is to reinstate the ban on usury - loan shark - interest rates rolled back over the last 30 years. And make that retroactive. Second step is to fund college for all - a WPA for education. That’s real MAGA!!
Alan C. (Boulder)
Capitalism at its finest.
Jane K (Northern California)
I think as Americans there may be one thing we can all agree on, we just want things to be fair. This tax law never was meant to be fair, it was meant to tilt toward the rich. It doesn’t help everyone in this country. It helps the very rich and some of those who live in states that lean Republican. It helps people who collect interest and dividends from stocks, ETF’s and mutual funds for a living. It helps people who have multiple homes in different places in the country. It helps the children of billionaires to inherit money they never went to work for. It doesn’t help those of us who work hard for a living, pay taxes in Democratic states, belong to unions, try to get an education or maintain certification for their jobs, buy uniforms for their profession or donate the small amount of extra they may have to charity. What would be fair is if small businesses were taxed fairly for their profits, not overtaxed for their success. What would be fair is if money earned by working a job was taxed less than money inherited from billionaire parents. What would be fair is if everyone paid some amount of taxes to show they had “skin in the game”, not just working people. What would be fair is if corporate profits were taxed at the same rate as the rest of us who work for our paychecks. What would be fair is if our taxes went to paying teachers a living wage, fixing our infrastructure and having access to healthcare without fear of bankruptcy. We all want a system that’s fair.
Sean Hawley (Seattle)
I firmly believe that the College Education should be made exclusive to the middle class families who can afford it. There should be, however, an universal access to specialized training that befit the market demands. However high-quality education must come with a high cost so that the best people, instead of the derelicts who can not find a job elsewhere, can join the teaching field and thus provide quality service. The college education, to a lot of its receptors, especially kids from low-income families, are futile, pointless, and fruitless, creating them financial burdens that needs years to pay back and squander their time. The classes taught in universities today, even the most ranking ones, still deviates from the essential demand of the marketplace. The fact is, the qualities that most companies appreciate, integrity, loyalty, etc., can not be cultivated through most contemporary colleges.
JaneinMD (Maryland)
Oh, for sure. And while we are at it, why not formalize the caste system with explicit rules about which economic castes can live where, who they can marry, and whether they should be allowed to have children or not? Upward social mobility through education and hard work is certainly not the American way! We have the privileges we have because we are entitled to them by birth. Long live the king!
Candice (Ohio)
@Sean Hawley This is ridiculous. I am from a dirt poor family, the first to graduate high school, then college, and have now completed the first of four parts of a difficult professional exam. So because I was from a poor family, I am somehow less than capable of being a successful professional? I think not.
I.Keller (France)
To provide the present, or even future markets with qualified workforce is not the sole or even main purpose of education. It is a very short sighted view which completely overlooks what safeguards a country's greatness and future. Also education is the one domain where everything should be based on equality of chances, talent and merit, and on absolutely nothing else. Creating inequalities there is undermining your whole country. As a side note no self respecting democracy should ever neglect the education of its citizens, poor or rich; unless one sees an advantage in having uneducated voters of course...
deborah wilson (kentucky)
Maybe Trump should give out free advice to these students as to how to work the tax system to their advantage. Somehow he would be able to figure out a way to deduct, depreciate and carryover everything they received.
nj9000 (New Jersey)
@deborah wilson. Maybe the prez can start a new Trump University that taches young people about tax dodging. Hey, he had his father to teach him. Time to level the playing field.
Joseph (Washington DC)
On a related note, I’m eager to see a story about students rejecting the encumbering loan burdens of college and opting for other paths forward. My niece and nephew graduate next week, were accepted to top schools, graduated numbers 5 and 6 in their class and their family still could not afford the cost of a college education even after generous scholarships. The student loans offered are a crippling scam and I’m glad my relatives have chosen not to participate. It was a hard, shocking choice but with a couple week’s perspective, I think they will be fine. No one at 18 years of age should undertake such massive debt for any reason. It should be criminal. I hope more people are waking up to this realization. Things must change.
DW from CT (Connecticut)
@Joseph - I agree. My daughter got into seven colleges and only one came close to being affordable. And it was NOT a state school. In fact UCONN would have been the most expensive. The only financial aid offered by the state schools were student loans, which really just help kick the can down the road. Instead she is going to community college this fall and transferring when ready, if she wants. Maybe two years is enough to get started on a career. Not everyone needs college and no one needs to be buried in debt.
wcdessertgirl (West Philly)
@Joseph I agree. My stepson just committed to a top university with the price tag to prove it. Even after the generous financial aid package my husband and his ex-wife have to pay over 25k in addition to my stepson doing work-study and borrowing about $3-5k per year. The Room & Board alone is over $20k per year. Why does it cost so much to live on a campus in shared space? The cost to have the on campus college experience these days to me does not really seem to be worth the price in the long run when you find yourself fresh out of college living with three roommates in a walk up because you have all these student loan to repay on entry level salaries. I guess it'll be different for my stepson because he's an engineering major, but my first job out of college paid me the exact same starting salary with my CUNY degree as my coworkers with degrees from top schools. And in a year I was promoted over them.
Lisa (NYC)
@Joseph Thank you Governor Cuomo. NY State has taken a lot of that burden off students.
gleapman (golden, co)
“Historically, after major tax legislation, the longstanding practice has been to correct drafting errors and other technical issues on a bipartisan basis,” Mr. Grassley said... Historically, the longstanding practice was for major tax legislation to go through regular order with committee hearings and many opportunities for both parties to offer amendments that are debated and voted on. Historically, the longstanding practice was that every Supreme Court nominee got a hearing and an up-or-down vote in the Senate. We know Mr. Grassley is a big fan of history. His selective use of "bipartisan" history for partisan purposes will be noted when the history of his tenure is written.
Barney Rubble (Bedrock)
Oh please! What makes you think that these kiddie taxes were unintended?
MTDougC (Missoula, Montana)
One question for our students and their families/supporters: Who did you vote for? If the answer is Republican/Trump, you're learning a hard lesson in civics......i.e. elections have consequences.
Mike Bonnell (Montreal, Canada)
LOL! You mean that trump's tax plan is hurting yet another group of "the not-affluent" class? What a shocker.
RCJCHC (Corvallis OR)
"Unintended?" Not so sure about that. They want us all ignorant, bankrupt, angry and tired.
wcdessertgirl (West Philly)
@RCJCHC 1000x this! When you consider how much things cost these days relative to what the average person makes it is very clear that the economy of our nation is designed to keep us "ignorant, bankrupt, angry, and tired." Most of the people I know are too exhausted and frustrated to be engaged in trying to change the structures and systems that have them effectively enslaved in a life they've been told they should want. I believe one of the major benefits of income inequality to the power structure is a significant decline in Civic engagement. The mid-century decades with the most income equality and economic expansion also coincide with the decades of the greatest expansion of civil rights, women's rights, gay rights, children's rights. Most people had only one job that ended at a reasonable hour and allowed them to be involved in their communities and stay up-to-date and informed on Regional and National politics.
Alecfinn (Brooklyn NY)
@RCJCHC Mr Trump has said in his rallies that he loves the uneducated. I shook my head in disbelief at the crowds screaming response. Condescending anyone?
Kim (New England)
@RCJCHC Because that's who votes for trump!
Bill (Queens, NY)
What a sham - in the legal sense of Sham - this is.
atb (Chicago)
Pathetic. We, as other developed nations, should offer heavily subsidized, if not free tuition to all Americans who have the demonstrated aptitude to be in college. For the rest, we should be marketing vocational schools. College isn't for everyone, but if we want an educated populace, we should be willing to support qualified students financially with our taxes.
Alecfinn (Brooklyn NY)
@atb Oh Please please!!! That's contradictory to what we see in Washington D.C. I used to believe the best qualified person should be in the job that served me well until this Administration. I also believed that most folk had the critical thinking to see through what was said to their faces. What happened is I am wrong, not the first time and probably not the last it's truly hard to keep faith in my countrymen and that's sad. And that's been stated to a crowd of Trump supporters. I was amazed that those folk were not insulted. Mesh!!!
Kevin L (03902)
This country can do nothing right. The government no longer functions, bound up by the structural flaws built in to it. Voting is pointless. So what if a Democrat wins? The Republican Senate will prevent anything from passing. I for one am done voting.
Never Ever Again (Michigan)
@Kevin L It's because of just that, not voting, why we got into this mess and ended up with trump. I don't believe there are "structural flaws" built in to the Constitution. But, I do believe the Republican party is tearing apart that Constitution along with our Democracy. I find voting a necessary responsibility. Otherwise, we will end up in a Dictatorship.
Rocky (Seattle)
@Kevin L What Democrats? The last two "Democratic" presidents were Republicans in financial matters. As was the last "Democratic" candidate. I'm done voting for centrist wolves in sheeps' clothing. How many meals has Barack Obama had in banks' executive dining rooms since retirement?
Alecfinn (Brooklyn NY)
@Kevin L I understand what you are stating but I disagree. Not voting just lets the same keep happening.
Mick (MA)
My take is that most trust-fund babies, like their parents, pay little or no taxes at all, as do the richest of the rich. Let's get real about what the problems really are.
DWS (Dallas)
Unintended? I go by the ECREE standard (extraordinary claims require extraordinary evidence) and the author’s evidence for unintended is in a word, scant.
Alecfinn (Brooklyn NY)
@DWS What makes anyone think this is an unintended consequence? Snake oil anyone?
Dan (NJ)
I'm really starting to think the South was right. Things would be a lot better for many people (and a lot worse for some others, I suppose) if this anti-intelligence, anti-environment, greed-driven philosophy was contained to a smaller geographical area, instead of imposed on a captive majority.
Zetelmo (Minnesota)
Ham-handed lawmaking without bipartisan review.
Steve (Philadelphia)
It’s unfortunate that Republicans didn’t read the tax bill before they passed it.
Kevin (Berkeley)
There's nothing worse than a learned person. The last thing we want are more people understanding how the world works. It's better this way. /sarcasm
Alecfinn (Brooklyn NY)
@Kevin Yup Mr Trump has stated he loves the uneducated.
Curious (Key West)
Every high school grad should be told never to take out a student loan as it will follow them for the rest of their life - including bankruptcy. The interest rates are killers and will prevent them from enjoying their young professional years. Do some research and find out how much compensation university presidents and board of trustees get paid. Those greedy universities are robbing are kids blind. Look for cheaper alternatives not status. In our days college was cheaper and college presidents dressed like they shopped at Sears . We never took out a loan, never, never, never and we did just fine. Take a gap year in between college courses to earn money and pay off your debts in cash. You will never regret it.
Edd (Kentucky)
@Curious Yes, and we went to class in concrete block buildings, and our professors actually taught classes, and we lived 3 to a room, (not in a suite), and we worked summers and we took classes that would help us get a job......and it did....a darn good one. Our states leading University just added hundreds of jobs....mostly administrative, and is building dorms that will be more luxurious than the apartments the graduates will be able to afford while they payback their college loans.
Alecfinn (Brooklyn NY)
@Curious I dropped out of college when I realized it would destroy what my parents had worked their whole lives to build. I chose to try to educate myself by myself I ended up working my up the food chain without a college education. I am 69 this year and I have reservations about anyone being able to do that now. That's sad.
Wm. Brown (SF Bay Area)
They got caught. The GOP’s tax bill was crammed together in haste, had no real hearings, no input from Democrats, and contained handwritten changes in the final version in the House. It was successful in giving corporations an unnecessary tax cut, and it also unnecessarily doubled the estate tax exemption for the wealthiest. But whether truly by accident, or by crafty design, it shafted university students. The GOP prefers an unthinking electorate. It’s hostility towards education, the educators, and the educated has long been clear. Shame on them. The founding fathers, whom the GOP claims to revere, would be disgusted.
Alecfinn (Brooklyn NY)
@Wm. Brown Right I see the same thing. Mr Trump has told his base in his rallies that he loves the uneducated.... I still shudder over that.
Ok let me guess. Since this effects low income people (likely POCs) the Congress will: 1. Pass a remediation bill post haste. 2. Analyze the problem for a year and the pass a bill to help. 3. Read the article and then do nothing. Please vote.
Alecfinn (Brooklyn NY)
@M E R Most likely number 3. Can't have the masses understand they are being duped.
Phyliss Dalmatian (Wichita, Kansas)
It's almost like all the BEST People in this Regime have no idea of what they are doing. Who could have guessed ?
Alecfinn (Brooklyn NY)
@Phyliss Dalmatian Disagree the GOP fully understands what they are doing. That's really sad.
sophia (bangor, maine)
@Phyliss Dalmatian: I just have two words for you, Phyliss. Be Best!
db2 (Phila)
@Phyliss Dalmatian Be best Phyliss, be best.
Port (land)
Someone has to pay the riches taxes might as well be poor hardworking smart kids. As long as Ivanka & don jr kids don’t have to pay, the tax hike for the middle class is working.
Ceilidth (Boulder, CO)
Unintended? I doubt it. Those children with financial aid are taking places away from the entitled spawn of the rich. This was a feature, not a bug.
Steve (Oak Park)
Yes, there is no reason for the Democrats to help fix this without getting concessions. It is just a matter of choosing those wisely. It needs to be something to A) benefit poor college and grad students (along with plenty of other people) and B) that is really painful for the Republicans to give up. It should also blow up the deficit further so that it requires Republicans to either be even more hypocritical (which you call them out for) or vote for deficits (which you call them out for).
Fred Frahm (Boise)
Haste makes waste and collateral damage, especially if Republicans are in a big hurry to pass tax relief legislation. Any remedial action can take its time, no rush.
proffexpert (Los Angeles)
How man of the affected students and families voted for (and will continue to vote for, sadly) a GOP candidate...like Grassley?
Marge Keller (Midwest)
I recently found out about the Public Service Loan Forgiveness Program. If you are employed by a state or federal agency or not-for-profit organization, you may be able to receive loan forgiveness under that program. A friend of mine has been working in the public sector as a school teacher for three years. Once she completes ten consecutive years in public service (meaning she has 7 years to go) and has been diligent in paying back her monthly loan, her remaining balance will "be forgiven" and she will be free of any outstanding college loans. Below is a link to the Federal Student Loan website. Not sure how helpful or relevant this information may be, but at least it's worth investigating, if not useful to even one college grad who is drowning in debt. https://student aid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service
Alex (Houston, TX)
@Marge Keller-I implore you to research the forgiveness rates of PSLF. Last year was the first year of forgiveness, and the forgiveness approval rates were appalling. Unless the issues with their approval process are fixed, your friend with very likely not have her loans forgiven. The truth is, our current political climate does not care about it’s educated population.
IZA (Indiana)
@Marge Keller Unfortunately, the PSLF program has a 99% rejection rate, and it's been in DeVos's crosshairs since she stepped into office.
Marge Keller (Midwest)
@Alex Thanks for your advise. I will forward your intel to her.
Paul (Brooklyn, NY)
There is nothing to “fix”. The provision was specifically designed to target everyone equally to ensure the “trust fund babies” can maintain their wealth.
Gloria (NYC)
If anyone thinks this was a mistake or oversight, I've got a bridge to sell you.
Siegfried (Canada,Montreal)
And your leaders are telling to watch the inequalities in the rest of the world and to tell yourself that you live in the land of freedom and opportunity.America is getting darker.
nothing to fix - it was planned.
KB (Southern USA)
Do you really believe this was "an accident"? Republicans have clearly shown they don't care about less fortunate people, only the uber rich. They are just mean. This was planned and they not only got away with it, but now will blame democrats.
SDC (Princeton, NJ)
I am cynical enough to believe this was intentional to discourage people from attending college. Trump loves the uneducated.
Alecfinn (Brooklyn NY)
@SDC Right just look at who is in charge of the Department of Education....Questions???
paca54 (Ann Arbor, MIchigan)
Does this apply to scholarships for sports?
Gary (Chicago)
@paca54 Yes. That's mentioned in the article.
elotrolado (central california coast)
This so-called unintended consequence highlights exactly whose interests are valued and prioritized by this Republican Congress and President: the wealthy and their corporations.
Anonymous (USA)
The article represents this as an unintended consequence of the legislation. It is very difficult for me to accept that. Not everything can be attributed to malice, but this? In 2019, in the United States? Yes, I attribute this to malice.
Padfoot (Portland, OR)
"Republicans now say they did not anticipate that it would raise taxes on low-income scholarship winners." Isn't that the job of legislators, i.e., to anticipate the effects of their bills before they pass them into law? Maybe if they weren't in such a hurry to give more money to their campaign contributors they might think about their constituents.
Ken (MA)
The flaws in the Republican tax legislation are a an ominous warning regarding Republicans ability to craft healthcare legislation. No one died as a consequence of this aspect of the tax code rewrite. The stakes are significantly higher for healthcare legislation. There is no basis for a belief that a Republican healthcare legislation would not include flaws with fatal consequences.
JLT (New Fairfield)
Warren Buffet said something like, "Class Warfare exists and my class is winning." Vote! The 1% is outnumbered but they don't want the rest of us to be educated well enough to do that math.
Charlie (Little Ferry, NJ)
Since when has a financial aid package been considered taxable income? This is outrageous!
Laura (Florida)
Gee. Just as "nobody knew" healthcare was so complicated, per DJT, it seems "nobody knew" tax law was complicated either. Some things can't be distilled to bullet points and sound bites.
Speakin4Myself (OxfordPA)
37% ??? That is less than double the rate my wife and I paid on $95K gross income in 2018, but not by all that much. Job creators? College students 'create' a decent paying job for the stats every time they are hired in their field. This is just another case of the government using student loans as a profit center rather than helping students. Studentloans.gov, a for-profit federal loan-sharking service.
Shosh (South)
Everyone needs to pay more taxes. More people need to be subject to taxes- having half of all adults pay nothing is not sustainable
Vail (California)
@Shosh Do you mean the super wealthy who are not paying taxes or some other group?
Barbara (New York)
Nothing like racing through a tax overhaul - some of it scrawled in the margins of the bill. Nice work, GOP
Practical Thoughts (East Coast)
Highly sought after employers have to expand their recruiting to other very good and deserving schools beyond the top 50 - 100 gateway schools. Organizations suchas; I-Banks, Hedge Funds, Blue Chip Consulting and Legal firms, Silicon Valley, certain non-profits and elite Atta & sciences orgs and elite mgt development programs in Fortune 1000; Getting a place in one of these orgs leads to a elite salary and serves as another credential to move up to those elite jobs. That’s why people are willing to break themselves to get into those schools. That’s why disadvantaged groups are arguing for spaces. Thats why rich people spend $500,000 to game the system. If opportunity to INTERVIEW were expanded to secondary state schools and smaller schools, young people could still feel confident in their chances while attending such schools and not going into tremendous debt or have a feeling of inferiority. As a note-the road to success is usually the road less traveled. But no one is listening to that right now.
true patriot (earth)
intended consequences. not an accident. on purpose.
Johnson (Chicago)
It’s hard to say what is the true cause of this. Republicans have shown themselves to be cruel over and again, but also lacking facts, evidence, and rigor over and again. So which of these is the true cause? Almost certainly both. Cruelty mixed with a lack of understanding the facts. That’s today’s GOP.
MitchP (NY NY)
This was not an unintentional effect of the 2017 tax bill. GOP went after blue states by removing SALT and blue voters -- college attendees requiring tuition assistance -- by increasing their tax rates.
Kosovo (USA)
It's not unintended, it's on purpose. Tax the poor, cut taxes on the rich. It's the Republican way. Just stop voting Republican and everything will get better.
C Wolfe (Bloomington IN)
What's the problem? Shouldn't we all just be happy for the privilege of living in a world of Donald Trump's making? Is there any price too high to pay for the glorious New Order? That's the gist of what his supporters will say.
John A. Figliozzi (Halfmoon, NY)
Mistake? On the contrary, this was not only intentional but in keeping with the entire philosophy behind the tax cut (no one dare call it reform) legislation that passed. Want proof? Watch how quickly the Congress won’t be able to pass a “correction”.
It's generous to say that this was an "unintended" consequence of the bill. Unintended like blue states being hit harder than red states? Unintended like the special arrangements carved out for people with private jets? Harming poor people is absolutely intended. How else can the GOP keep desperate, low-wage labor available at all times?
Blackmamba (Il)
Who knew that Jared Kushner and Ivanka Trump were more equal than everyone else in America who didn't have the meritorious qualified wisdom to pick parents like theirs?
Dagwood (San Diego)
Republicans like taxing college students, enforcing draconian student loan conditions, and making it harder for them to vote. If they had their way, all the benefits of being American would be offered only to Republican voters.
Are you sure it was unintended? Or was it known, but not dealt with because these low-income students don't matter to the people who were drafting the law?
Peter (Chicago)
I remember a recent time that a massive bill was passed that had some errors in it, and before too long the House of Representatives changed hands. Perhaps the Dems can cooperate on making this tax law change a bit less onerous after the GOP helps with the obvious ObamaCare fixes that they have stonewalled for years...
KT4300 (VT)
I can attest to this. Our daughter got a full ride to a top 5 university, being the Valedictorian of her rural high school and working relentlessly for 4 hard years. Unlike the rich parents paying millions to get their kids into top colleges through cheating and lying, she got in through sheer willpower, tears of exhaustion, countless SAT tests, and hard work of 4 years. She got the full ride because our income is low - it is basically half of her annual college cost. She also got a number of outside scholarships - all merit based. Those help cover her mandatory health insurance, room and board. While in college, she lives half the country away from us - and she does not live under a bridge, nor does she eat out of trashcans - what the federal government imagines college kids in school full time on full ride scholarships ought to do. She is now being taxed at a whopping 20% rate, having her scholarship her only income, and to add insult to injury, they even tacked on a penalty for not paying estimated taxes on it before April 15th. I guess this is one way to tell the next generation to don't bother, the Republicans will do their best to disenfranchise even those working the hardest to advance themselves. The GOP's attempts at "simplifying " our taxes by giving everything to the rich and influential, and leaving nothing to the rest is just another way for the Republican party to show how little ordinary people really matter to them.
Nick (Brooklyn)
It's almost like nobody really read the new tax law before voting for it. It's almost like their consultant buddies who provided the wording (wrote it) simply assured them they'd see their taxes on that Hampton house go down and got a signature. I wish I wasn't so cynical but it's entirely too plausible.
La Resistance (Natick MA)
If this was truly an error, it should not be hard for the GOP to get behind reversing the provision retroactive to its first application and refunding the tax erroneously collected, with interest. Democrats should vote for such a fix as a first step toward rolling back the whole misbegotten thing.
Dan (Sandy, Ut)
When people establish policies in their haste to keep their supporters happy the law of unintended consequences comes into play. But, with the Greed Over People party and Trump, the law is a given.
Quandry (LI,NY)
This was done with intent, knowledge and perhaps spite. All the while businesses and the wealthiest were ultimately being taxed at lower rates. If memory serves me correctly Mulvaney was head of CBO then. He knew exactly what they were doing. Remember that. This needs to be remediated with bipartisan support, just as fast as when the GOP passed its unilateral tax act.
Mike (MD)
Jesse A. Solis, a Republican spokesman for the Ways and Means Committee, said that the 2017 tax law had achieved a long-sought goal of simplifying the tax code. “When we first discovered that changes made to how unearned income for students is taxed was having unintended consequences on some college scholarships, we quickly went to work on solutions,” Mr. Solis said. They made is so simple that they were unable to understand the full impact of their own tax law, but somehow we are expected to believe that they simplified the tax code...
RR (Wisconsin)
“Historically, after major tax legislation, the longstanding practice has been to correct drafting errors and other technical issues on a bipartisan basis,” Mr. Grassley said... Well this says it all, doesn't it? Our legislators have so little faith in their own law-writing abilities (or interests?) that they're just fine with making mistakes that can be dealt with "later." What a joke. On all of us.
History Professor (New York City)
A tax on survivors' benefits? Why not? Trump announced his preference for service members who weren't captured. Presumably, he also prefers those who weren't killed in action. Call it the Gold Star Tax and let him and his Congressional minions wear it with pride. And call the tax on low-income students' benefits the Strivers' or Strugglers' or Ambition Tax. Or we could just call the whole package the Take Up the Billionaires' Slack Tax.
Texas voter (Texas)
Our son was a National Merit Scholar coming out of High School, and received a $2000 scholarship. Looked nice till we received the 1099 form this year - he had to file a 1040 and pay taxes on his scholarship, while we were also paying his expensive college bill! Of course, we should have been smarter - and hired expensive lawyers to avoid paying any taxes like his POTUS.
Hank (NY)
If only Low-Income College Students were taxed like hedge fund managers
Malcolm (NYC)
Why are scholarships taxed at all? This is crazy. Any merit-based scholarship awarded on an equitable basis should be them tax-free.
Carol (Aurora, Illinois)
@Malcolm. Long ago, any scholarship or prize which was awarded on merit, and for which the recipient did not apply, was tax-free. Think: Pulitzer Prize, for example. In our rush to characterize taxes as the worst thing on earth (for the wealthy) we have taxed the poorer of us even more.
Brett (Syracuse)
In one question, you can some up inequality in this country and our broken tax system: Why should Jeff Bezos get a tax refund while the poorest Americans get their college benefits taxed at record margins, along with Gold Star families?
Heidi (Upstate, NY)
Only the GOP would tax students. After all they are the population with the lowest voting record and easy to eliminate when they do vote, just disqualify the absentee ballot.
ebmem (Memphis, TN)
It is entertaining how this narrative is advanced as a consequence of evil Republican intentions. Under Obama, Democrats proposed taxing all student financial aid, including tuition and tuition waivers. They were proposing to tax it as earned income, which would have also made it subject to FICA and Medicare taxes.
Libby (US)
@ebmem The republicans were in control of congress under Obama, not the democrats.
Sailorgirl (Florida)
How do we balance education and opportunity? The biggest problem we have is that the administration and it’s GOP colleagues represent their anti education base. They have tied education to elitism instead up elitism to class. The two are not the same. Since when is an educated middle class elite? We are all just trying to make a living. 529 plans and there special tax benefits are basically open to a certain class of individuals. Those with plenty of left over cash (Elites). Those who go to college on decades of tax sheltered growth should be taxed on their unearned income like minority poor students and indentured student athletes.
Jeff (Brooklyn, NY)
@Sailorgirl Respectfully disagree here. 529 plans are a vital tool to make college more affordable for families who wouldn't otherwise be able to pay out-of-pocket. We certainly shouldn't punish middle class folks who save a couple hundred dollars per month for 18 years to subsidize sending their kid to a good university. Neither students receiving scholarships, nor families who use 529 funds should be taxed.
Rick (Summit)
Colleges are endless money pits. If it weren’t for their exemptions from sales tax, property tax, income tax, capital gains tax etc., how would they afford to pay the basketball coach $6 million a year? How could the college president and the rest of the administration makes its millions if they had to pay the same taxes other businesses pay? We sold our customers worthless degrees and now they can’t make payments? Government bailout, please.
Robert (Houston)
I find it hard to believe this was an oversight. This was an intentional attack on the viability of college being an option for those unable to pay out of pocket and unwilling to take out loans. Yet another attack on our education system by the party that has many who believe public education should not be a right. The consequences are obvious though. Anecdotally, a couple of friends I know had to abandon their research programs as the stipend received is now taxed to a point where they can no longer pay basic utilities and rent. Why encourage research driven by universities when shareholder monopolies provide all the innovation we need right?
AJ (California)
This is but one of the gems included in the Republicans tax giveaway to the rich. Another hidden item is the tax now imposed on the lawyer fees when a court settlement is reached. So when you pay the lawyers their fees are now subject to taxes at the highest rate. No wonder they rushed it through without oversight or public comment...
David (California)
we all need a place to live, food, and toothpaste and a toothbrush Students and non students alike. People are rightly concerned about the taxes they pay because for most of us it comes directly out of our living expenses. We are far less concerned about the taxes that other people pay out of their living expenses, because it is not u This is a good case in point and a good lesson for the incidence of taxes on the average working person and students of course.
rjs7777 (NK)
People receiving money or in-kind benefits are privileged and should be taxed heavily. I was. And the money that paid my tuition was earned, not given. It’s not about past income, it is about their income now and their privilege level now and going forward.
Jennifer (NJ)
@rjs7777 They should pay increased taxes today based on their incomes in the future?
Fran Taylor (Chelsea MA)
@rjs7777 Your advice is itself an in-kind benefit and apparently we all need to pay taxes just for reading it.
KB (Southern USA)
@rjs7777 Except that how does one pay taxes when no money is handed forward? If they are given room and board at a college, where are they going to find 37% cash to pay the tax?
Pat (Chicago)
I was in this exact situation, and I helped many students lessen their tax burden. I received about $16k for my room and board at school - I am required to live on campus - and I had a job where I made about $5k. My "income" was $21k, and I almost had to pay a crazy sum - around $1600 federally, I believe - on top of $900 for my Illinois taxes. It all came out to about $2,500, or 50% of my income. For those that are reading this, there are ways to pay less - 1. Evaluate if you can file as an independent. This means you covered at least 50% of your expenses, not your parents. This was true for me, my federal taxes dropped to $750. 2. Use the American Opportunity Tax Credit. My $16k was just counted as income, and my textbook expenses were not covered. Textbook expenses are valid expenses for this tax credit. I collected my receipts in case the IRS decides to audit me. I got about $500 in textbook receipts, which gets automatically deducted. 3. Evaluate if you can file in a different state. My IL tax was extremely high - but I spent less than 70 days there a year and I started establishing residency in CT. I vote in CT, I have had three different jobs in CT, I spent more than 180 days there, etc. The typical recommendation for college students is to file in their home state, but I do not intend to return to IL and I don't ever work there. So, I filed in CT, and didn't have to pay any more than I paid through my jobs. $900 saved. All in all, I paid about $250. Good luck.
Jeanne (NYC)
For the American Opportunity Tax Credit, all expenses required from school can be included (You have to be at least a part-time student). If you buy a laptop, need a software, included the cost when calculating your qualified expenses. Keep the receipts of course.
Curious (Anywhere)
@Pat Such machinations shouldn't be necessary. We should be willing to fund affordable higher education.
Pat (Chicago)
@Pat Minor clarifications on the American Opportunity Tax Credit because I ran out of space. You can claim up to $2500. This tax credit can also be partially refunded to you, so you could get money back if your tax burden is not as high as mine. The first $2000 can be used at full value, so $2000 spent on education can potentially deduct $2000 from your taxes. You get 25% of the next $2000, so up to $500 from your taxes. You can have 40% of the credit refunded, so up to $1000.
GRH (New England)
There has to be a middle ground between the absurdity of increased taxes on financial aid, scholarships and stipends, on the one hand; and Elizabeth Warren's plan to punish anyone who is an older Millenial or Generation X who tried to be responsible and pay back student loans (via her loan "forgiveness" policy that is mainly targeted for younger Millenials and Generation Z, without any corresponding cash refunds and/or repayments back to the people who have already paid back loans). Perhaps if colleges would try to contain costs a little, tuition for everyone would go back down and none of this would be an issue? All the proposals and/or reporting one sees is focused solely on one side of the issue. Maybe colleges should stop offering climbing walls; separate gourmet vegan and gluten-free cafeterias; and, most of all, stop paying college presidents and other top administrators seven-figure salaries?
Truthtalk (San francisco)
@GRH Advancing social justice through progressive policy change should not be seen as a punishment for those who struggled through a more punishing system. I spent 25 years paying back medical school loans (just in time to co-sign loans for my kids’ college costs). Now NYU medical school is free. I don’t feel punished. I am thrilled that young doctors can have the chance to enter into lower paying specialties or work in underserved areas without worrying about their student debt.
atb (Chicago)
@GRH Speak for yourself- I'm Gen X and have lots of loans yet to repay, probably for the rest of my life, for the crime of going to graduate school. We should be supporting and encouraging Americans who further their education and make this country better with their minds, not punishing them with a lifetime of debt.
Jeremy (New York)
@GRH I'm writing on this topic and I'm genuinely curious: would you consider Elizabeth Warren's plan "absurd" if it included financial compensation of some kind for older Millennials and Gen Xers who paid off their loans? I'm a middle-of-the-road Millennial with more than $250k of student loan debt (undergrad + law). I understand your ire--that future kids will get something you didn't--but your point about "tried to be responsible" is where your tone gets the best of you. To suggest that students who are saddled with more than six-figures of debt are being "not responsible" or "irresponsible" is deeply unfair. They, like you, are trying to improve their individual lot--and by extension that of their fellow American. I agree that colleges could scale back on unnecessary perks--rock walls and high salaries for administrators in particular. I disagree that students who are coming of age in this time are "irresponsible" because they want to pursue higher education. I support financial benefits of some kind to people who have long paid off their student loans. The only "fair" idea I can think of, however, is that all prior *Federal* loan borrowers should have their total interest and/or capital refunded. I think that would be of great interest to people like yourself (and even myself). Would you be ok with loan "forgiveness" (I strongly dislike that word, getting a higher education is not something for which one needs 'forgiveness') if it included you, too?
David Ohman (Denver)
As I recall, when Liz Warren was nominated to run the Consumer Finance Protection Bureau, which was her creation — then rejected by the Republican-controlled Senate — she offered a revolutionary idea: As homeowners were rushing to refinance their mortgages with a falling interest rate, Warren suggested that student loans should also be open for refinancing to ease the burden upon those graduates going into their careers. Of course, once again, the Republicans in Congress sided with the lenders instead of those graduates. Today, with the bankers caling the shots on the CFPB, this department now serves Wall Street, despite its name.
ebmem (Memphis, TN)
@David Ohman Obamacare doubled the interest rate on federal student loans. Not one Republican voted for it. There is nothing preventing students from refinancing their student loans. The problem they have is finding someone willing to give them a lower interest rate on an unsecured loan. The rate for student loans is tied to the federal borrowing rate, which is increasing. So students refinancing today would have to pay a higher rate than when they borrowed the money. You may also recall that nothing in Warren's plan to help students involves reducing the cost of a college education.
RR (Wisconsin)
@ebmem, Re: "You may also recall that nothing in Warren's plan to help students involves reducing the cost of a college education." Actually, lower interest rates on student loans WOULD reduce the cost of a college education -- just like lower mortgage-interest rates reduce the cost of housing. It's not trivial. Think "bottom line." And while I don't recall the exact "Warren plan" referred to here, I did watch Senator Warren on TV last night, arguing for tuition-free college. And you know what? She almost convinced me.
Lightning McQueen (Boston)
@ebmem "The problem they have is finding someone willing to give them a lower interest rate on an unsecured loan." It is not a typical unsecured loan, though. It cannot be discharged in bankruptcy court. Special treatment for these lenders should mean special obligations to the public.
AMH (Boston)
As part of any compromise to fix the 'kiddie tax' and related issues, I sure hope the Dems from the Blue States push hard for a change to the limit on tax deduction for state and local taxes (SALT). SALT was another victim of the 'anti-Blue State' provisions in the Trump tax bill. At the very least, people filing a joint return should be able to take a $20k deduction rather than the $10k limit in place across the board currently.
ebmem (Memphis, TN)
@AMH They get a $24,000 standard deduction, twice what an individual filer gets.
Nick (Ca)
@AMH Makes sense, but you're not thinking of it from a Republican point of view. They want to govern with partisan spite and punishment, not democratic representation of the people of their country. Therefore, what could be better than forcing those blue state libs to pay more in order to cover corporate and big-wealth giveaways?
SDC (Princeton, NJ)
@AMH, you know that was intentional. To punish blue states for not being red.
Homer (Atlanta)
I remember graduate students lobbying hard against this change a couple years ago. It would be hard to say it wasn't intended - or at least known - at the time the bill was passed. It's likely they just didn't care because they wanted to get the bill passed. ALSO, actual trust fund babies are now getting all their money from super-funded 529s, which come out tax-free.
ebmem (Memphis, TN)
@Homer There is an easy fix. When colleges award financial aid, they gross up the payments and withhold the taxes owed. The outrage is that the colleges are charging $12,000 to feed and house a student in a double room for two 15 week semesters. That works out to $400/week or $1700 per month for a student to share a bedroom and eat. the colleges should add $2562 to the grant of $12000 for a gross grant of $14562 and figure out how to reduce the $12,000 cost by 20%. It's all funny money anyway.
Jane K (Northern California)
And are not likely to pay any taxes on their inheritance of many millions of dollars they never worked for themselves...
MarathonRunner (US)
Higher education and its related costs are problematic. More and more students and college officials want to pass out "free" money (as if such a thing really existed) and now they are upset that this (essentially) unearned income is being taxed. They can't have it both ways. EVERYTHING ultimately comes with an associated cost. Rather than being appreciative of the financial assistance received, these so-called "smart" college folk are essentially claiming that they want the "benefits" of the financial aid without the requisite responsibility of paying the taxes on this income. Enough! If you don't want to pay your taxes, don't go to college and don't accept an aid package which might have tax implications. Good luck.....
@MarathonRunner There are plenty of free benefits that go to others that are not taxed, usually because there is a desire to achieve some social outcome. So, for example, corporations get deductions for things that humans do not, because we want to encourage production (and because there is some lingering clinging to the dual taxation theory). Farmers get some tax benefits for subsidies because we claim to want to help them (all other evidence to the contrary notwithstanding). Welfare payments are not taxed, and some other government benefits are not taxed because it defeats their purpose. If the goal of these packages is to encourage low-income students to go to college, then there is logic to giving them beneficial tax treatment. At a minimum, one has to wonder why they are taxed at a marginal rate that is higher than the rate that would apply to ordinary income - that makes no sense at all. I take it you don't consider yourself a "smart" college folk. One benefit to going to college is that it helps you to look at the big picture, though of course like experience can have the same effect. Step back and consider whether you think there is a societal good to having educated people. If not, then no reason to give beneficial tax treatment; if so, then perhaps there is - if it's the most efficient way to achieve the goal.
Jean Chai (Charlotte)
You are missing the point. The tax rate is set to the level of millionaires on scholarships typically given to the poor.
ebmem (Memphis, TN)
@E We should eliminate most corporate welfare. Eighty five percent of farm subsidies benefit the top 10% of wealthy farmers. There is not excuse for the cost of a college education to be three times what it was in real terms 30 years ago. You have two students sharing a dorm room who are paying $12,000 each for room and board for 30 weeks of the year. It is absurd. The reality is that welfare benefits should be taxed in order to alleviate the welfare trap. Currently, many low income households cannot afford to work overtime or take a promotion because the incremental income eliminates more in tax free benefits than the new income adds.
Lilnomad (Chicago)
Just another example of GOP stupidity, reductionist policy, and lack of humanity. Why is financial aid taxed at all? Why are survivors' benefits taxed at all? It seems crazy that billionaires pay no taxes and a struggling student gets the rug pulled as they attempt to get ahead. Only in America...the land of lost dreams.
Blunt (NY)
This is ridiculous! Don’t tax these poor devils at all. Time to tax the wealthy and the mighty and leave the regular people alone. They have shouldered the burdens all this time. They fought “our” wars, paid for our stupid and greedy mistakes on Wall Street by going bankrupt and losing their homes. Now this! Enough! Kill inequality. Vote Bernie and/or Liz 2020.
Bob Richards (CA)
@Blunt This is a discussion about federal income taxes (not, for example, a 10% VAT that Democratic presidential candidate Yang wants to impose which will be paid by rich and poor alike or payroll taxes). The "regular people" (including, as you call some of them, "poor devils") have not "shouldered the burdens all this time". In 2016, the 1% of taxpayers (where a "taxpayer" is a personal income tax return which could, for example, be a joint return) reporting the highest income paid 37.3% of total federal income taxes. The top 50% of taxpayers paid 97% of total federal income taxes (the other 3% were paid by the bottom 50%). Some low income taxpayers, due to refundable tax credits, actually pay negative federal income taxes (i.e., their federal tax refund is greater than all the federal income taxes they paid during the year).
melissa (chico calif)
unintentional? nonsense
Alexander Bumgardner (Charlotte, NC)
As if decades of indentured servitude and interest - only payments weren't enough. SMH
Dan (New Hampshire)
This was intentional. Republicans hate colleges because they primarily donate to Democrats and they treat "Liberal college students" with contempt. This is the Republican way of bleeding innocent Americans dry however they can. Despicable.
Sam (NJ)
Wait a minute, are you telling me a massive tax bill that was released for public review less than 48 hours from being voted on, that contained hand-written revisions in the final bill, and that was not properly vetted through committee, has unintended consequences?!? Well color me shocked!!
Vail (California)
@Sam Funny, I guess after the last 2 years nobody is shocked any more as to what is going on in a Republican controlled government. Hope the college students are reading this article and vote.
MT (Ohio)
So this is what we are doing now? Taxing already poor college students to pay for the lower tax rates of hedge fund managers and corporations? Shame on the Republicans. Wake up people. Gen Z-ers- vote!
Lisa (Montana, USA)
@MT Most of Gen Z is still too young to vote.
Still Waiting for a NBA Title (SL, UT)
I don't believe for a second it was unintended.
Jules (NY)
Paul Ryan What a huge disappointment.
Paul (Los Gatos, CA)
While this is certainly a problem, the Democrats shouldn't waste time this year on fixing it. It's a GOP problem; let them own it all the way into the next election. And, paste them with it. Then the Dems can campaign on this: - Look what the GOP does to you? They tax DEAD PEOPLE and you, dear voter, pay. - If you vote us in in 2020, we'll fix it then, retroactively. This is all part of learning how to play politics smarter. Re-label this as the "GOP Tax Plan on Dead-Veterans' Children". Re-label the tariffs as "Trump's Tariffs that Give Welfare to Brazilian Criminals and Red-State Farmers, for Nothing". Every time you (or the media) mention one of these items, include that moniker. Kind of like how Trump adds an asinine nickname to everyone he dislikes. You easily remember those, right? Does anyone remember "Death Panels"? That code word for trying to stop the ACA is the model for how the Democrats need to communicate to win in 2020. Just ask Prof. Lakoff at UC Berkeley about this.
Barbara Reader (New York, New York)
@Paul The estate tax starts on estates over $11 million. Yes, tax dead people. George Washington approved and signed the first estate tax to limit intergenerational accumulations of wealth.
Truthtalk (San francisco)
@Paul I can’t in good conscience support continuing to tax low income college students until 2020 for political gain. Perhaps this is why the GOP wins so many battles...they have no conscience.
chuchog (PA)
Wow, how naive of me, I thought Republicans just wanted to cut taxes to the rich, it turns out they also wanted to raise taxes to the poor. It seems that the general premise that Republicans are pro-rich is false, they are also anti-poor, after all, being poor is a symptom of moral lacking right?
Kristine (USA)
my vote is that it was intentional.
Robert (Out west)
Yeah, they tried this back when I was in grad school. I had a tuition waiver and a small grant to live on—about $600 a month for ten months (summer, you were on your own)—and they tried to tax me as though my income were around $35, 000 a year. A group of universities got together and told them to take a flying leap. But I can’t help wondering just how unintended this really is. Coupled with what deVos and those clowns did to student loans, I wonder how much it’s a combo of stupidity, paying political debts to lenders, and just plain deliberately making it harder for guys like me to get a doctorate.
ebmem (Memphis, TN)
@Robert Democrats voted in 2010 to double the interest rate on student loans, and not one Republican voted in favor.
DRS (New York)
It's fine to point out a tax issue, but why the need to be so divisive with the phrase "trust fund babies"? The term and use implies that everyone with a trust (God forbid parents help out their kids!) is in the same financial position as every other person with trust (some kids with trusts have zero access to them, or a trust could be small, perhaps enough to take care of someone with special needs), and implying that they are all some sort of leaches on society and when many are hard working, highly educated and productive people. Just stop with the ignorant pitch fork rhetoric already. It's getting tiresome.
Jules (NY)
@DRS I think that term speaks for itself, and if it is derogatory, it is only because that tax code originally ONLY helped the rich, since they were the only ones who take advantage of it. Unfair on some levels for sure, and now that poor people are being caught up in the fix of that tax work around, it is kind of ironic. Dont you think.?
libdemtex (colorado/texas)
Student aid should be tax free.
Vero (Valparaiso, Chile)
@libdemtex, I agree.
Thomas Payne (Blue North Carolina)
Anything and everything. Everyone's familiar with the concept of "death by a thousand cuts." "I LOVE THE POORLY-EDUCATED!" - D. Trump
John (Stowe, PA)
Leave it to Republicans to jack up tax rates on financially disadvantaged talented and deserving young people to help pay for welfare for billionaires
David J (NJ)
@John, it’s the Republican business model. Lead with contempt. Whether it’s your constituents or your customers. ie, airlines, insurances, medical, oh, I could go on and on. I bet so could you.
Leanne (Normal, IL)
@John It's not their fault! I mean, it's not like they actually read the bill or anything...
Tom (Upstate NY)
This is same consequence that occurred with children of gold star veterans. There are two narratives: GOP legislators punished people for not being rich (making the oversight intentional) or it was an accident. Regarding the latter though, one has to wonder how much attention the rich got on their wish list compared to the rest of us. Donations, perks and future lucrative employment guarantee that the people we all elect fawn over their benefactors. Since Congress spends half its week chasing down donations on the salary we pay, there was probably not enough time to look over the needs of the rest of us quite so thoroughly.
Barbara T (Swing State)
The New York Times covers issues better than any other newspaper. Thank you for your important work.
Ignatz Farquad (New York)
Please remember to thank REPUBLICANS this little “mistake” in November 2020.
There are 3 pillars democratic candidates should build their campaign on and focus on implementing when in office: student debt, health care and the inequality of the tax system. This is a prime example of why Republicans are unfit to govern. It is a fact most of the Republican legislators who approved this did not even read or understand all the potential consequences of the tax cut legislation they approved. The ones who did do not care, losing health care coverage or not being to able to make sure their children get a proper education and not start life in indebted servitude is not something they have to worry about. The DNC needs a nationwide campaign drilling home these points, and how disastrous the consequences of voting for Republicans are for the average American.
Ellen (San Diego)
@M Good list! Student debt - free tuition to public colleges, even community colleges, for deserving ( by income and grades) students. Healthcare - Medicare for All, phased in. The inequality of the tax system. Yes, at a time of the highest income inequality ever, it needs a fix. Add a few more - reduce the bloated, $750 billion plus per year gift to the Military Industrial Complex. Use the savings for something that helps our domestic situation, such as figuring out ways that our tax dollars and policies can work to mitigate climate change, and determining ways to make an economy that provides real, living wage jobs. Which politicians will be stepping up?
David Ohman (Denver)
@M If only the Repub's were simply unfit to govern. The fact is, ever since Reagan's first term, they have pursued a policy of "starve the beast" for the sake of minimalist government. they hate governement and thus, are repulsed by the idea of governing. And this has been the basis of The Heritage Foundation's 50+ year campaign to establish, in perpetuity, one-party rule — run by an extreme form of conservatism. Steve Bannon has campaigned on driving a stake into the heart the federal government "and kill it" in his words. And this has been his message touring across Europe promoting his nationalist agenda.
Charlie (Little Ferry, NJ)
@M Great list indeed! In fact, on the inequality of the tax system. So ... let's get this straight. College financial aid is considered taxable income while people can rest money in offshore accounts tax free ... just let that sink in for a bit!
David M (Chicago)
I don't get it. Trump was able to write off years of losses to avoid paying taxes on his future profits, while students run a deficit year after year, yet have to pay taxes on their current losses.
Bill (North Carolina)
@David M No, you understand it well. It is a lesson to all of us from the founder of Trump University.
EPMD (Dartmouth, MA)
Un-tax the rich and tax the middle class, the republican strategy of the last 40yrs continues. When I was a medical student in early 1980's, President Reagan enacted the first wave of deficit spending back tax cuts for the rich and added taxes to scholarship stipends including my $3000 stipend in the national health service corp scholarship meant to help pay for books and other expenses. The republicans have no shame and continue to disrespect the middle class and the poor.
Karen Lee (Washington, DC)
The Republican tax bill 'hitting tribal funds dispensed to Native American children and young adults, and the families of service members who died in combat, some of whom saw hefty tax bills for their children’s survivor benefits this past spring.' So, the inheritance tax exempts the first few millions from taxation, while the tax 'reform' requires bereaved children to pay taxes when their parent is killed. I thought the Republicans were so proud to "support our troops"; guess this doesn't apply to their families.
Steve (Florida)
In a country of 327 million people, even "small mistakes" in the tax code can harm millions of decent people. This is why we need thoughtful, competent people in Congress, not party hacks and ideologues. (And it's why President of the United States should not be an entry level position.)
ebmem (Memphis, TN)
@Steve We lived through eight years of Obama.
Ben K (Miami, Fl)
The entire tax bill was structured to further subsidize the rich off the sweat of the not rich. No mystery here. It is a consequence of the positive feedback loop that began to spin in Reagan's time and has accelerated into the present: lowered taxes on the wealthy grant them more capital to buy more politicians who make policy that favor more wealth building, so they can buy more politicians and increasingly more favorable policy.... and so on. Until we have the Citizens United decision, which again accelerates the loop through the tax law, which enriches the rich and extracts from everyone else. The Republican Party is hired for this. They did the job they were paid to do. It is up to the orange salesman to convince everyone possible, through emotion, that they should focus on other things. Nature does not like positive feedback loops. The systems spin out of control, ending in disastrous disintegration. Like cancer, or nuclear fission. If corporations are people, as per Citizens United, they should be subject to the AMT like everybody else. Amazon can't make billions and still get a refund. Broke students shouldn't have to pay to subsidize Amazon, Sheldon Adelson and IQ45. And while we are correcting the tax code to fix the 37% tax on student aid, restore the SALT deductions, elimination of which were a form of warfare on blue states. We are tired of subsidizing red (hat) states.
Andy (Salt Lake City, Utah)
Calling the tax a "mistake" is a little too generous. These kids who had the misfortune to earn a scholarship during a bad tax year aren't going to receive a refund. The financial strain may have lasting impacts are their long term outcomes. 12 percent on $11,500 leaves $10,120. 35 percent on $11,500 leaves $7.475. A loss of $2,645 or roughly $1,300 per semester. That's very well the difference between finishing an undergraduate degree and dropping out. It's like quicksand. You're cash broke so you need a job. The job makes you time broke so you bomb a class. Bombing one class is demoralizing. You end up under performing in other classes as a result. Academic discipline threatens the scholarships you do have thus making your financial situation even more anxious and uncertain. Finally, the student burns out and gives up. Probably with some debt to pay off and no degree. That's more than a mistake.
Monique (Texas)
@Andy I wish I could "Recommend" this 1000 times. This is exactly the point. While everyone else is discussing the political implications, this "mistake" has real-life ramifications for real people which could detrimentally, even disastrously, alter the course of their lives.
ebmem (Memphis, TN)
@Andy The college should increase the grant to cover the tax bill and then withhold the excess. They can take the money out of things like: ten million dollar annual coach salaries, two million dollar college president salaries, $385,000 salaries to Elizabeth Warren peers who teach 90 hours per year of classes [freeing them to consult for insurance companies full time],
kkseattle (Seattle)
This is happening to Native Alaskan youth in villages that may send only one or two children to college each year. At tax time, they are finding they owe hundreds of dollars, when the entire income of a family that lives largely off subsistence hunting and fishing may be less than $10,000. But at least Ivanka and Jared got a break in their inheritance taxes. Priorities, you know.
PB (Northern UT)
I doubt this was an unintentional oversight by the Republicans. Here is the key: "While the change increased tax bills for some groups, it also effectively capped the amount of taxes for wealthy individuals." Trump and the Republicans are not only bad at governing; they are intentionally punishing (low-income children and families, their ignorant anti-abortion bills that hurt women, eager for wars, tariffs that hurt American businesses and consumers, children at the border, The Dreamers (they are kids, for heaven sake,)...and so it goes with the GOP. One thing for sure, after middle, working-class, and poor children are born, the Republican Party is not the pro-life party. Pro-life includes protecting nature and the environment as well.
Al (California)
I simply don’t believe the feeble excuses that mistakes were made. The tax increase to younger people is described as a “little noticed provision in President Trumps sprawling tax code”. A “provision” is something that was written by someone, accepted by others and imposed on its intended target. Trump raised taxes on young adults seeking a college education. What’s so complicated?
Look Ahead (WA)
Mitt Romney exposed GOP sentiment on taxes when his "makers and takers" remarks at a private GOP fund raiser were secretly recorded. He knew exactly how to appeal to his audience of wealthy donors. Maybe that is why the IRS devotes a disproportionate amount of effort auditing poor single mothers for the possibility of technical infractions of earned income tax credits, while ignoring high profile billionaires who are lawyered up to drag out the fight. Or treating the scholarship money of low income students the same as trust fund shelters. This was no accident, it was quietly slipped into the huge bill to satisfy the GOP donor class, just like Romney's remarks. I am glad it was exposed on the front page of the NYT.
Miryam (USA)
I view this little 'known' tax provision targeting students coming from very little financial means families as not only intentional but maliciously intentional. Sadly, I'm beginning to believe that our entire system has been intentionally engineered by our blasphemously greedy leaders over the last thirty years to force anyone with little to means to be personally indebted financially so that they have essentially no political power points to use against- the powers that be, now or later. We're going back the draconian days of debtors prisons. Time to read Orwell again.
Marc (Sterling, MA)
It pains me to point this out, but while the low-income college students are taxed as much as 37 percent, our Billionaire Loser President lost $1.17 billion, which appeared to be more than any other U.S. individual, and has paid NOTHING in taxes for decades. SAD!
ebmem (Memphis, TN)
@Marc Trump, with his measly few billion in wealth, has paid more in federal income taxes than Warren Buffett and Bill Gates on their $100 billion plus in wealth. Really sad.
Xoxarle (Tampa)
If we didn’t heavily tax these impoverished students, how would we as a nation be able to afford tax rebates to Amazon and Delta Airlines? Priorities, people. Priorities. Students can go without meals, but we surely we don’t want to ask Bezos to go without yachts and private jets? That’s barbaric.
NYer (NYC)
The war on middle- and lower-income people by Trump, Mnuchin & Co. continues ... and escalates! As well as their war on education. Taxing students for financial aid for college education? How low can you go? And meanwhile Trump and Apple pay NO taxes?
Older Than I Realize (Mountain Time Zone)
With this administration, it’s always about money and it’s always about punishing “enemies”. The new fiscal conservativism: corporate welfare subsidized by graduate students. These are not deep pockets. Not sure how the fact that US colleges are filling up with Chinese students fits into this. Could you send an investigative journalist out to cover this? (My daughter is studying to be an investigative journalist right now, on her own dime, our dime, the college’s dime, 3 different scholarships’ dimes... so many dimes!)
RRI (Ocean Beach, CA)
Covertly raising taxes on the poor to fiance massive giveaways to the wealthy and corporations is ever a feature not a bug in GOP tax policy. Good luck getting it changed anytime soon.
Jake (NYC)
The tax bill had to balance the tax cuts for millionaires and billionaires somehow!
Chuck (CA)
Yet another move by plutocrats in Washington to repress college education for students who are not wealthy or who do not have wealthy parents. This is all about keeping the wealthy wealthy, and keeping others from free opportunity to become wealthy by stacking them with debt and high taxes to soak every dime they have and then some. Applying a marginal tax rate of 37% to students who legally obtain financial assistance is just criminal. This nonsense HAS TO STOP.
Hah! Another ‘well designed’ function of the GOP tax bill is uncovered at the detriment of the poorer in our economy.
Phil (Austin TX)
This was intentional. Republicans know that college educated young people do not vote for them. So they decided to hurt them. Simple...
Jason (Chicago)
The process of drafting and passing this bill should be taught to all government students as well as in congressional orientation as an example of cruelty and carelessness that fails to take the time to consider the various unintended consequences of hastily drafted legislation. The intended outcomes are an abomination in our age of increasing inequality; the unintended ones even more so.
old lady cook (New York)
@Jason The tax bill was written by lobbyists who were making changes at three in the morning so Congress could pass the bill in the dark of night.
Andy Makar (Hoodsport WA)
Funny how problems like this never inconvenience the GOP's wealthy donors. I'm sure the tons of lobbyists made sure there was nothing in the Code that affected the wealthy.
Tom (Arcade, NY)
My gosh, for all but the wealthiest among us, tuition room and board is a considerable expense to say the least. I would say leave it all untaxed. Whether a kid receives aid through fafsa, his or her own efforts and accomplishments, or a combination of the two, we won't balance the budget this way.
Bill smith (Denver)
It wasn't unintended. It was known and talked about at the time of the bill. Republicans do not care. Their only policy plan is to cut taxes for the rich and raise them on the poor. That is it that is all they do.
Ladyrantsalot (Evanston)
I can't believe Republicans continue to kid themselves that the tax hike they imposed on students and middle class homeowners also "simplified" federal taxes. I actually had to fill out an additional tax schedule this year because they removed the line for "additional income" from the 1040 Form. Prior to the 2017 tax hike, I could simply record my measly $200 royalties on the 1040 Form. Now that tiny amount must be recorded and filed on an entirely separate form. The most aggravating part of the extra work was watching that blank swath on the new 1040 Form, their meaningless tribute to Steve Forbes.
ek perrow (Lilburn, GA)
What makes one think this was unintentional. Perhaps this is just another example that the members of Congress do not read pending legislation? Just another reason I think repealing income taxes and instituting a national sales tax is the best solution for funding government operations and programs. We would eliminate Congresses ability to tailor taxation to select individuals, groups and businesses. Only unprepared food, clothing, shelter (a single primary home) housing rentals for non-home owners and medical expenses would be exempt. Our system of taxing income does not pass the common sense tax.
Dani F. (Oakland)
@ek perrow It is essential for the economy that money/capital moves through it -- wealth and growth happens through the use of money, not hoarding it. Taxing that movement, and only that movement, will disincentivize the economy very strongly.
Barbara Reader (New York, New York)
@ek perrow Sales taxes are strongly regressive. You want to tax the poor and not the rich. You should LOVE this tax.
Larry (Oak Park, MI)
A thought. Congress is unlikely to do anything, at least of serious consequence. Forget about the banks. I wonder what would have if 75%, 50%, or even less of those owing, choose to default. Would that make a difference?
Rhsmd1 (Central FL)
@Larry yep. no more college except fpr the uber rich
Casual Observer (Los Angeles)
The Congress can fix this very easily by excluding money transferred for this purpose. It clearly falls outside the intent of the law. However, there is a clear plutocratic preference in everything coming out of this administration. That the legislation clearly hurts low income people may make it too delightful to them to want it to end too soon.
Carl M (West Virginia)
This was not unanticipated. Colleges and universities were immediately aware that the new law would cause many educational scholarships and assistantships to be taxed. It took significant lobbying to prevent the tuition discounts from graduate fellowships to be exempted from income tax under the new law. To soften or reduce the financial cost of the tax cut, Congress was looking for easy ways to raise taxes somewhere else, and educational benefits were one of their targets.
Dan (NJ)
According to the CDC the U.S. birthrate has dropped to its lowest level in 32 years. This story provides yet another reason why people think twice before starting a family. The cost of raising a child continues to grow and extends over more years in the lives of families. We need to reverse this trend. Tax reform is a good place to start.
E (Pittsburgh)
@Dan That's part of it but the data is very clear that as women's education levels and income increases the birthrate falls. This is happening all over Japan, Europe, etc. Any population growth is going to have to include a hefty dose of immigration, which is a dirty word in the GOP.
Fire (Chicago)
We also see why anti abortion policies in the this country have taken off like wildfire. The conservatives care little for the sanctity of life but they care a lot for maintaining its lower wage tax base to keep them flush with income.
Blazing Don-Don (Colorado)
@Dan. My heart goes out to young couples in this country who are not having children because they feel too financially strapped to do so. That said, we should celebrate rather than bemoan overall trends toward population stabilization/reduction, both in the US and other countries around the world. With 7.7 billion people on this planet now, a number growing by 200,000 daily, our poor overburdened planet needs fewer, not more, people. It was just days ago that the UN Report was released describing 1 million species threatened with extinction in coming decades. Population growth is a major driver.
Clayton Strickland (Austin)
Grassley says that "Historically, after major tax legislation, the longstanding tradition to correct drafting errors and other technical issues is done on a bipartisan basis". He must have forgotten about the GOPs refusal to address known issues in the ACA. While this issue should certainly be addressed, Democrats should insist on some rollbacks to the tax scam.
Amanda (FL)
@Clayton Strickland And historically, Congress would pass a budget bill or tax law with a majority and use budget reconciliation to fix errors and flaws. The GOP skipped step 1 and shoved the tax law through the touch-up phase since they knew that was the only way to pass it.
DSD (St. Louis)
Grassley is as dishonest a politician as any of them.
P.C.Chapman (Atlanta, GA)
"Unintended Consequences" The intention was to cap the set of all trust fund recipients disbursements to limit the tax exposure. The majorities aides on Ways and Means were skillful statute authors. Part of that skill is giving and taking in the tax code. Give some set of taxpayers relief and make up the lost receipts by imposing new levels of taxation on another set. Can you be surprised where the credits and debits on this arcane section of law wound up?
Steve (Florida)
“Historically, after major tax legislation, the longstanding practice has been to correct drafting errors and other technical issues on a bipartisan basis,” Mr. Grassley said. Except when it comes to ACA where the "longstanding practice" of the Republican party has been to try and make it fail.
EGD (California)
@Steve It didn’t need any help to fail. It was designed to do so in order to put us on the path to universal care.
Mathias (NORCAL)
Republicans read polls. Educated people are the enemy as they typically fight against authoritarian rule and often don’t vote republican. Stop giving republicans a pass. They are attacking everything in our society to further their power. Title should read, “Republicans attack higher education to promote their power base.”
Leone (Brooklyn)
@Mathias well said.
Jeff (Brooklyn, NY)
@Mathias Very insightful take. I would not put it past them. It aligns with the Republican-led callous student loan interest rates, and goes further still. These are not policies that encourage educational attainment and upward mobility, plain and simple.
wvb (Greenbank, WA)
Many of the comments say that this is not an "unintended consequence" of the tax bill rushed through the Republican Congress. I disagree. I think it is a sign of the incompetence of the Republican legislature and this President. If they had taken the time to carefully consider the language in their signature bill and not just gloat about passing a major tax cut for corporations and the wealthy, they would have realized the consequences of this portion of the bill and made the necessary changes.
Pquincy14 (California)
The key line, as usual, is that this adjustment to the taxation of kid's income was mostly intended to _limit_ the taxes that the kids of the very wealthy pay: "While the change increased tax bills for some groups, it also effectively capped the amount of taxes for wealthy individuals." Trust the Republicans in Congress: they would drive a bulldozer over the bones of orphans and widows if it reduced billionaires' taxes by 0.1%! The Republicans' reckless approach to their Billionaire Tax Cut bill was bound to create collateral damage anyway, but beyond that, we must always remember that even when Republicans pretend they are 'doing good', it is usually a pretext for helping the very very wealthy interests who own them, lock stock and barrel.
Ray (Fort Mill, SC)
More and more I believe that politicians don't even bother reading the entirety of new legislation. All they look for are the issues that they are interested in. Someone put this language in the bill and was fully aware of its effect. The president, evidently, does not pay taxes on his "billions", but low income and middle class students working hard for a step up have to harbor the burden of taxation for merit scholarships. This is the Republican way. Disgraceful.
David Ohman (Denver)
@Ray Bear in mind, while the Republicans controlled both the House and Senate, Speaker Paul Ryan refused to allow Democrats in the House to even attend the meetings to review proposed legislation. Thus, only the Republicans knew what was sent to the House floor for a vote. Secret meetings in the wee hours of the night have been the Republican "standard operating procedure" in every branch of government they controlled.
Fla Joe (South Florida)
Meanwhile Betsy Voss is pushing billions in tax-free vouchers for students to go to private schools, religious schools and schools that screen-out certain students (like LGBT jids). Just another piece of the right-wing dogma that passes for fact in the Trump-GOP Administration. Soon the Federal government will pay for religious education and tax secular. So much for the Constitution and any common sense. All tax payers will foot the bill at Liberty University for supporting Trump, but there will be taxes on students at state universities.
kenzo (sf)
LOL, tax on the working and middle class and poor who are trying to find some way to complete college. Orchestrated by a president who paid NO taxes while siphoning off millions for himself through his bankrupticies and "deals", that lost billions of invenstors money. There will always be shysters and frauds. The truly sad thing is the fools from those middle and poor classes who voted for the hukster.
AG (Ex Expat)
Meanwhile, actual trust fund babies are laughing all the way to the Caymans.
I don’t think this was oversight. Trump loves the uneducated. He has been attacking the middle class, especially in blue states. This is just another tactic in that fight.
BlueDrySky (Los Angeles)
Perhaps if there had been hearings on the tax bill this type of "little-noticed provision" would have been uncovered before it was enacted. This bill was drafted in secret, the Ways and Means Committee held no hearings on the specifics of the bill, and it was passed by a simple majority using the reconciliation process. That information should have been included in the story.
WI Transplant (Madison, WI)
Seems like every day something new is revealed about this tax bill. Let's keep this simple, ANY REPUBLICAN TAX BILL TAKES MONEY FROM THE POOR AND GIVES TO THE RICH. Another reason for straight ticket Democrat voting going forward. And although Elizabeth Warren may not be the most popular candidate, she is the BEST CANDIDATE to correct the direction of American freedom, democracy and equality.
robert (Boston)
Unlike other forms of taxable unearned income, taxable grants and scholarships enjoy the regular standard deduction, which for a single taxpayer in 2018 was $12,000. For students with no other income, this means they can have up to $12,000 of taxable grants and scholarships before owing any tax. The taxation of scholarships needs to be fixed, but let's not overstate the problem.
ms (Midwest)
@robert Not to understate the issue, my local community college costs $14,000 a year, estimating $5,000 for "room and board". A large number of students - including foster children who have aged out of the system - are homeless. This is not even a middle-class area, and I still don't know of any place where one could live and have money enough left to eat for $5,000. The food pantries are uncoordinated, have uncertain schedules, and require transportation to get to them. And that only encompasses the first two years of college; the cheapest years. You live in Boston, where it is much more expensive to live, so it appears you have very little understanding of what minimal living costs really are, nor what tuition rates really are.
robert (Boston)
@ms I am not sure how your comment relates to mine. That schools in your area are not providing adequate funds to cover reasonable living expenses is not related to the whether their grants and scholarships are taxable - and if it's inadequate, then shame on the schools who could provide higher budgets (and shame on the federal and state governments for underfunding financial aid for the most needy students). Based on the figures you cite, your students will not be facing any income tax on their scholarships at all. The scholarships that cover their grants, fees, and course related materials are tax free, and the remainder are less than $12,000 - so there's no income tax owed.
kkseattle (Seattle)
@robert Incorrect. Dependents don’t get their own standard deduction, and their parents don’t get an additional personal deduction for them. The rest is not whether the parents actually claim the dependent, but whether the dependent can be claimed. Since it is highly likely that the parents are providing over half the student’s support, the student cannot claim his or her own standard deduction.
Henry Boehringer (Dutchess County)
So this how hard work and effort is rewarded. States subsidize their college and universities from tax revenue to keep costs down and enable people to advance themselves . This subsidy is equivalent to a tax free scholarship. Penalizing a students effort that goes into being awarded a scholarship is contrary to the self reliance and work ethic that this country is based on .
njn_Eagle_Scout (Lakewood CO)
Are you sure it is "an unintended consequence"? Good chance it isn't...
Dan (NJ)
@njn_Eagle_Scout Completely agree. They snuck in all sorts of dumb shenanigans to make they permanent tax cuts for the rich look less ridiculous than they actually are. Eliminating the SALT deduction was probably the most egregious. I'd be willing to bet we see quite a few more of these cropping up.
SR (Bronx, NY)
They love the poorly educated, after all. Makes perfect sense to attack the wallets of those who'd rather not be.
Wally (LI)
Very hard to believe this was unintended.
Muirnov (Washington, DC)
@Wally Odds are it was one of two things: a well-informed, welfare-hating GOP tax lawyer making a long-planned surgical strike on a complicated provision of the tax code in the black hole that was the drafting of this bill OR, a totally uninformed MAGA-ite who has no idea what they doing but saw the phrase “unearned income” and jumped to conclusions that this money went to “takers” and he could rise in MAGAland by heroically jacking up taxes on it.
The Ed (Connecticut)
It is a real stretch to say that this change was unintentional. The language is deliberate and we were aware of these consequences when the law was changed so obviously the legislators who voted for it were also aware.
David L. Wilson (Flushing, NY)
@The Ed Correct. In fact, Erica Green had an article in the Times on the subject back in 2017. https://www.nytimes.com/2017/11/15/us/politics/house-tax-bill-higher-education-increases-tuition.html Doesn't anyone see the irony that the GOP wants "merit-based immigration" to fill STEM jobs at the same time that it imposes tax increases that discourage US students from seeking higher education?
EricA (Vermont)
@David L. Wilson Thank you very much for posting this link. It clearly shows that the consequences for students with college aid money were understood before the bill passed. The GOP leaders created this problem deliberately.
Mark Shyres (Laguna Beach, CA)
@David L. Wilson It's horrible, but may I ask why is it "news" two years later?
Crazy Me (NYC)
A stable genius with a big, beautiful brain is needed to mess things up this badly. Perhaps we should be thankful he hasn't repaired health care yet.
Julie Parmenter (Bloomington, IN)
My Grand daughter got a huge tax bill for 2018. She is a hard working student with two part time jobs. She has a few scholarships and had to pay a hefty tax last year. Where is she supposed to get the money? She skipped meals because she is poor. She got sick as a result. Her hair began to fall out due to malnutrition.She refused money from us to help with the taxes. This is cruel, plain and simple. Why can't we encourage college participation? Oh yea, she is graduating with 4 1/2 years, with a masters in computer science with a 3.8 GPA. And don't get me started with student loans and their usury interest rates. Why this is not indexed to the prime rate is unconscionable. So are draconian collection practices bordering on harassment. Fix this!
Mathias (NORCAL)
College educated people are typically liberal in outlook. They have been targeting education for years.
Christina (Midwest U.S.)
@Julie Parmenter The details in your story are so troubling, so unjust. You are right to call for "Fix this". But the young and struggling don't have any sway with the GOP, who respond to their wealthy donors, without conscience or regret. And if the Democratic-controlled House aims for a fix, the GOP in the Senate will block it because Mitch M, who has the power of a dictator, wouldn't give Democrats a victory to claim. I've read analyses lately predicting a great Democratic wave in about 2024 or so, when Gen X, Millenials, and Gen Z voters are a bigger share of the electorate. No wonder. These young people have been used as corporate's ATM machine for their education, which is their chance for a future. And that chance for a future has been threatened by unmitigated school shootings and a neglected need for climate action their entire lives. What a world to inherit.
JerryV (NYC)
@Mathias, You have hit it on the button! Because college-educated people tend to vote Democratic, the Republicans will do whatever they can to hassle them. They figure that really smart people like our president do not pay taxes at all and only little people and suckers actually pay. We need a new Democratic President and Congress to return America to the people who actually build this country..
Pashka (Boston)
We're a country that feeds on its children. Drive them into debt as soon as they step out of high school, tax them, bleed them...
Yossi (Concord, MA)
@Pashka It only feeds on its poor and lower-middle income students. The wealthy get to buy kids' way into college and then, even if caught, get little more than a slap on the wrist. And if they "donate" a building, or an endowed chair, rather than trying to bribe admission officials, they get praised for generosity. The U.S. that welcomed my great-grandparents and helped my family climb the economic and social ladder is turning into a plutocratic, oligarchic, kleptocratic, xenophobic, neofascist state.
Sha (Redwood City)
And send them to wars (mostly the ones from lower income families) based on lies to further enrich some corporation or appease some hard liner group, and leave them a warming planet with devestating consequences.
Thomas Payne (Blue North Carolina)
@Pashka They are deep in debt when they are born.
Rick (Summit)
Interesting that the cost of college expands with the students ability to pay. All the tax breaks, alumni contributions, government subsidies, tuition, loans etc and college is still unaffordable. Colleges are fearful that their revenues will be cut if recent graduates tell younger siblings not to take on loans so now colleges are lobbying for a loan bailout. And in this article scholarships must be tax exempt because unlike every other time money changes hands, the government can’t have a piece because colleges need more money.
Robert (Out west)
Gosh! Good thing churches and TV preachers never do that, huh?
Jonathan (Oronoque)
Colleges could give these students a 'job' where they had to work one hour a week at a rate of $250 an hour. It would then be earned income!
David (Switzerland)
@Jonathan Subject to FICA at 6.2%, then Federal and State income tax and unemployment insurance contribution. Plus the employer would have to contribute their part of the payroll tax, provide workers compensation insurance and administer it all. It would also confuse the relationship as employer or educator. Best off schools continue providing scholarships based on clear criteria.
Pquincy14 (California)
@Jonathan A tax law that encourages bogus action to avoid taxes is a badly written law -- a term which applies to pretty much any tax measure every written by a Republican (and plenty written by Democrats, too).
Enrico Palazzo (Silicon Valley)
What do you expect when we have an administration that does everything for the rich and nothing for the middle class. Instead we are giving huge amounts of money to corporate farms, which are not going to lose money in a trade war with China and tax breaks for the obscenely rich. If you aren't angry you should be.
CarolSon (Richmond VA)
Gee, maybe in their zeal to get that tax bill passed (the only bill passed, by the way, during their two years of all-GOP government), they overlooked it? Nah, probably not. The GOP is great at blocking effective presidents from getting anything done, harassing Democrats in power, voting in lockstep, and apparently not having a shred of decency or compassion. They cannot govern. They do not care about anyone except the rich.
Madeline Conant (Midwest)
@CarolSon In a nutshell.
baldo (Massachusetts)
@CarolSon "They do not care about anyone except the rich." ... and the fetus.