- Campus Community
Proposed tax reform and higher education
Dear University of Maryland community,
I write to inform you that our University has voiced strong opposition to H.R.1, the Tax Cuts and Jobs Act, because it discourages participation in college, makes it more expensive for low- and middle-income students to attend, undermines the financial stability of universities, and—by swelling the national debt—impairs the Federal government's ability to invest in higher education, research, and economic growth.
Our Federal relations staff weighed in extensively with Congressional staff members. University of Maryland Foundation trustees spoke with members of our Congressional delegation. Members of our campus community, including faculty, administrators and students, wrote letters. Graduate students, here and elsewhere, staged protests. I joined presidents of peer institutions and higher education associations in advocating against aspects of the House's tax reform bill.
The most concerning provisions of H.R. 1 include taxing tuition waivers for graduate students; taxing tuition benefits for employees; taxing teaching and research assistantships; and eliminating the deduction of interest on student loans.
In addition, the elimination of the deduction for state and local income taxes and sales taxes puts downward pressure on state budgets, thereby potentially impacting state funding for higher education. The reduced incentives for charitable donations could lead to a drop in philanthropic giving, which would then result in fewer institutional scholarships and increase financial pressures on students and their families.
The tax reform under consideration by the Senate would not eliminate student and employee benefits, unlike H.R. 1, but would eliminate the state and local tax deductions and reduce philanthropic incentives, like H.R. 1. Should the Senate approve its bill, expected sometime this week, the differences between the House and Senate bills will have to be reconciled in conference. We will urge our members of Congress who are at the table for that conference to continue fighting to strike the most hurtful provisions from the final version.
Since the end of World War II, the partnership between the Federal government and universities has helped drive the prosperity, security, and betterment of our nation. To win the future, we must continue to invest in our students, in a skilled workforce, and in university research, creative work, and innovation.
I urge you to connect with your elected representatives to express your views on the proposed Federal tax overhaul.
Wallace D. Loh