Interim President Farnam Jahanian provides input on highly criticized tax reform bill
Congress has been in a rush to write out and pass a new tax reform bill in what would be the Republicans’ first major legislative accomplishment since they won control of both the legislative and executive branches of the government last year. One version of the bill has passed the House of Representatives, while the Senate recently passed its own version of the bill, mostly along partisan lines. They hope to reconcile the two versions of the bill and send it to President Trump’s desk for his signature before the Christmas holiday.
The tax reform bill has been widely criticized for the very rushed process involved in passing the bill that has happened mostly without Democrats’ input and which seems to be at least partly for the purpose of giving Republicans a legislative win before the end of the year. Republicans rejected a motion by Democrats to adjourn the vote to Monday to give senators time to read the several-hundred page bill. Essentially, the situation can be summed up in a CNN headline: “[t]he Senate voted on a tax bill pretty much nobody had read,” and was still being revised (even with handwriting in the margins) at the last few hours before the vote.
Besides the rushed process, the tax bill would add, according to a nonpartisan analysis, about 1 trillion dollars to the deficit. The essence of the bill is a massive cut in the corporate tax rate from 35 percent to 20 percent, while individual tax rates will be cut for a few years. According to Vox, besides corporations, the tax bill would favor older and wealthier Americans who get more income from investments rather than wages (as corporate tax cuts will primarily benefit shareholders).
Younger people, future generations, and the poor would stand to lose the most from this tax plan since the individual tax cuts would eventually expire (while the corporate tax cuts stay permanent) and the deficit will have to be shouldered eventually, whether through tax hikes, or chipping away at social services, or some combination of both.
What concerns Carnegie Mellon interim president Farnam Jahanian most are the provisions in the tax bill that would make higher education more expensive. Thus, he sent out a statement updating everyone on the provisions of the tax bills relevant to the campus community and higher educational institutions as a whole. In the statement, he blasted the parts of the legislation that would, as he termed it, “cause serious harm to higher education.”
Jahanian listed some key provisions of the House tax bill that he called the most “distressing”: “those that would tax graduate student tuition waivers, eliminate the exclusion of employer-assisted tuition benefits from taxable income and end the deduction of interest paid on student loans,” which he criticized as having the effect of “increas[ing] the cost of education and reduc[ing] student access.”
While he said that he was “pleased” to report that the Senate bill does not contain such provisions, “threats to higher education remain.” He cited as an example of a threat to higher educational institutions an excise tax levied on private university endowments of over $250,000 per student.
“While this level will not directly impact Carnegie Mellon,” Jahanian wrote in the statement, “our endowment is a crucial way we support scholarships, fellowships and the student experience, and this step would set a negative precedent for philanthropic support of higher education.” He also noted that because of the hurried legislative process, “the possibility [exists] that some of the worst provisions of the House bill could reappear as part of a legislative compromise.”
Jahanian praised the efforts of the Graduate Student Assembly (GSA) to inform Congress and the public on the harm that the tax bill would cause to higher education and encouraged concerned students and faculty to make their voices heard.
“[W]e must keep up the intensity of our outreach,” he wrote near the conclusion of the statement. “I want to reaffirm our commitment to advocating for students and for higher education, and promise that we will continue to keep you informed.”