Reps. Pappas and Tauscher
July 23, 1997
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A question from William Bracken of Somerville, MA:
Dear Congressmen Pappas and Congresswoman Tauscher,
Why, given its name, does the House version of H.R. 2014 eliminate the current tax exemption for tuition waivers that some universities give their graduate students as part of their compensation for doing what often turns out to be the bulk of undergraduate teaching? This is one of several features of the House version of the Tax Relief Act that make it just the opposite of tax relief for people like myself. The others were the House bill's failure to extend Section 127 (tax exemption for employer-provided educational assistance) and its failure to establish a Student Loan Interest Deduction. All of these pro-education forms of tax relief are in the Senate's version of the bill. I hope the House members of the Conference Committee will see that these are serious flaws in the House version of H.R. 2014. Do either of you have a view about how these differences will get dealt with by the Conference Committee?
Thank you for your time.
Rep. Tauscher responds:
I agree that the House-passed tax legislation is seriously flawed -- that is why I voted against it. Americans need tax relief, but it must be distributed fairly. Unfortunately, the House bill fails to maintain current tax exemptions that assist students in affording their education, and unfairly skews the benefits of the tax cut to the wealthy. I have sent letters to the Conference Committee members requesting that the exemption for graduate tuition waivers be extended, that Section 127 be extended, and that interest on student loans be made tax-deductible. It is my hope that the conferees will agree to the Senate language on these issues, and that the final tax reduction legislation will more evenly distribute the benefits of tax cuts.
Rep. Pappas responds:
The question relating to taxability of tuition of graduate students will be settled in conference. The original intent of this provision was to add as income the free tuition given to the children of those employed at educational facilities, it was not the intent to tax the tuition of those students who are receiving tuition in exchange for services that they provide to the school. Ways and Means Chairman Archer has sought to clarify this intention since it was brought to his attention.
I would like to see this clarified as I have four fine colleges in my district: Princeton University, Rider University, The College of New Jersey and Monmouth University. I also have four community colleges in the district and Rutgers, the state university, is also nearby. I intend to be as supportive as possible to their concerns. I am committed to ensuring that government encourages the pursuit and accessability of higher education.