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Tax bill is a nonstarter for higher ed

November 29, 2017
Dorothy Leland


The tax reform proposal making its way through Congress seems to ignore what most Americans now recognize as fact – higher education is both the key to upward social mobility in our nation and an irreplaceable driver of innovation in our society.

A bachelor’s degree is becoming the new standard for employment in a growing number of fields, and advanced degrees are increasingly in demand. University researchers are the source of some of the most important discoveries, breakthroughs and inventions our world has ever seen.

Why, then, does Congress seem so intent on making higher education less attainable and making things more difficult for the colleges and universities that provide it?

Take our students. Many of our undergraduates are first-generation students from underrepresented backgrounds. Their families already struggle to help them through school, and this bill will remove their student loan interest deductions and other tax benefits.

Graduate students are a unique case. UC Merced and its faculty rely heavily on grad students to lead and support projects that can generate groundbreaking discoveries benefitting society in innumerable ways. These low-income and middle-class graduate students, many supporting young families, are working tirelessly to advance their careers. Taxing the tuition reductions they so desperately need, as this bill proposes to do, could be the straw that breaks the camel’s back and leads them to look for other jobs that could pull them away from their research and out of academia.

It defies logic to suggest this somehow benefits us as a nation.

Universities will have their hands tied by this bill, as well. During a time of stagnant or decreasing public funding for higher education, colleges and universities are increasingly reliant on philanthropic support. Charitable giving helps provide scholarships for undergraduate students, fellowships for grad students, endowments for faculty researchers, and aid for student support programs.

Rather than encouraging philanthropy, this tax bill discourages it. Increasing the standard deduction for tax filers will decrease the number of people who file itemized returns, which removes a key incentive for charitable giving.

The bill also creates a new excise tax on university endowments, which are critical for providing student financial aid and support for faculty research.

UC Merced and the University of California system have joined countless public and private institutions and associations across the country to decry aspects of the proposal that would make higher education more expensive and less accessible and have a negative financial impact on the university, our students, faculty, staff and retirees.

Extensive outreach to members of the House and Senate is ongoing. The UC Advocacy Network has urged members and supporters to make their voices heard in Washington. National coalitions and advocacy organizations have worked to mobilize members and those concerned about impacts to the higher education community.

Recent legislative battles have proven the public’s collective voice still carries much weight in our political processes. As the Senate bill progresses, and with the looming prospect of a House-Senate reconciliation process, contacting elected officials in Washington is crucial to ensuring they understand the adverse impacts their tax reform bills could have.

I will continue to make sure our concerns are front and center with our delegation in Washington; I urge you to join me.

Dorothy Leland is the chancellor of UC Merced.