The GOP Tax Plan Would Hit Massachusetts Hard

There have been so many articles about the ways in which the tax plan coming out of the GOP-controlled Congress is bad for America. To briefly recap:

  1. It raises taxes on the poor and lowers taxes on the rich (here);
  2. It actually raises the federal deficit, which conservatives generally consider the biggest long-term threat to America today (here);
  3. It will do nothing to spur employment growth, but will increase dividends and corporate profits (here);
  4. It raises taxes on the poor and lowers taxes on the rich (here).

I’m sure I left some things out.

Aside from being a Robin Hood in reverse, this tax plan would have probably derailed my education and, thus, my life had it been in effect in 2009. That is for one simple change – tuition benefits for graduate students would no longer be tax exempt. This sounds like not a big deal, but it is.

NPR wrote a story showing exactly what that would mean for an example PhD student. In 2016 this student earned a $30,000 stipend, on which she paid taxes – about $2,500. But under the new tax plan, she would be taxed on both her stipend and the value of her tuition (which is paid for through grants) – about $60,000 total. Her tax bill would then be about $7,500, a $5,000 increase. 

The Massachusetts Angle

This particular change in the tax code is appalling for me on a lot of different levels. Pragmatically, it discourages people to go into the very fields where we need a lot more people – those which require advanced training, such as scientists, engineers, doctors, etc. Philosophically, it punishes low-income graduate students, while people who fly in private jets will get a tax break.

Without going off on a tangent, I do think that issues of free speech and tolerance of a wide range of ideas needs to be addressed on college campuses – specifically liberal tolerance of conservative speakers and events. Richard Reeves published an article through Brookings pointing out that small liberal arts colleges (like my alma mater) are especially bad at allowing conservative speakers to go on stage.

es_20170314reevesfreespeech
In red are colleges that have disinvited conservative speakers since 2014. You can see that it tends to skew toward wealthier institutions. Source: Brookings Institute

 

Even more troubling, a recent Brookings Institute poll showed that 20% of college students think it’s acceptable to use violence to silence objectionable speakers. To re-emphasize, 1 out of 5 college students are OK with cracking some skulls if they don’t like what the people have to say.

I suppose it’s unsurprising then when our president said, “I love the poorly educated,” at a campaign rally. And maybe we shouldn’t be surprised that a conservative congress is trying to stick it to all those (presumably liberal) graduate students seeking advanced degrees. But from the Mayflower to the US Geological Survey to the Space Race, The United States has historically been a place that values and supports the pursuit of knowledge. This tax plan is a distressing departure from that tradition.

A big reason I chose Massachusetts is precisely because it is a state that is defined by the presence of higher education institutions. Thought leaders from around the country and around the world come here to learn, discuss, and dream. That makes this element of the tax plan that much more dangerous to the state.

Boston colleges
Boston-Area Colleges and Universities. Harvard gets four stars because it’s Harvard, I suppose. Source: MassGIS

The Boston area alone has 52 institutions of higher education. The Pioneer Valley has at least 15 (not counting some of the less prestigious institutions – sorry Baystate Medical Center Midwifery Program!). And, of course, some of the most august institutions in the country – with some of the most robust graduate programs – are located in the state, including Harvard, MIT, Amherst, and Williams.

PV Colleges
Pioneer Valley Colleges and Universities. Source: MassGIS

Universities as Anchor Institutions

Unlike the heavy industry which left the Pioneer Valley in the 1950s through 1980s, higher ed has been in the region for hundreds of years and is unlikely to go anywhere. Universities serve as “Anchor Institutions,” engines of economic development that aren’t easily transferable elsewhere (similar to medical institutions).

As this article from CityLab points out, “General Motors in Flint, Michigan, picked up and left. And with it went all of these jobs, and that really decimated the economy. Wayne State University in Detroit? They’re not going to be picking up and leaving.”

It doesn’t take an expert to see the economic impact that these institutions have on the region. Amherst, home to three post-secondary educational institutions, boasts among the highest real estate values in the region. The areas around Smith and Mount Holyoke are home to thriving cultural districts and numerous small businesses. What would Westfield be without Westfield State University?

This tax plan is going to hit the Bay State, and the Pioneer Valley, hard. An assault on learning is an assault on Massachusetts. I know that my life would have been irreversibly harmed if I’d had to pay taxes on the grants I received while earning $12,000 per year pursuing my master’s degree (it would have gobbled up virtually all of my stipend).

Unfortunately there are thousands of others in the same boat today, many of them our neighbors. Let’s keep our fingers crossed that at least that part of the plan, if not the whole thing, doesn’t pass.

 

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