The Coalition for the Life Sciences (CLS) is very concerned with provisions in HR 1, the Tax Cuts and Jobs Act, that will adversely affect the biomedical enterprise.
Congress has long supported a strong investment in biomedical research and the CLS is extremely grateful for this continued investment. This investment has contributed enormously to our nation’s goals of improving the health of our citizens, protecting against infectious agents, and advancing our global competitiveness in the industrial sector. However, HR 1, as originally proposed, undermines this investment in biomedical research through provisions of the bill that would make higher education unaffordable to the next generation of investigators.
As HR 1 is written, it would repeal Section 117 (d)(5) of the Internal Revenue Code that allows colleges and universities to lower the cost of graduate education for their graduate students who are serving as teaching or research assistants as part of their academic training without the tuition reductions counting as taxable income. According to data from the Department of Education, approximately 145,000 graduate students benefit from the current waiver –60% of tuition reductions went to graduate students in science, technology, engineering, and math (STEM) programs. Repeal of this provision would result in thousands of graduate students being subjected to a major tax increase, thus attracting fewer students to enter the STEM fields.
The U.S. needs a generation of biologists who are well trained and who have talents to move their research into the 21st century. Repeal of 117 (d) (5) is counterproductive to this goal.
Furthermore, H.R. 1 proposes a tax on private college endowments. Essential to the success of the research enterprise is an investment at our leading universities, academic health centers, and research institutions. These are the cornerstones of a modern economy, in which discovery and new ideas create the engine for growth. Imposing an excise tax on nonprofit private university endowments is a short-sighted move that will only harm students and their families. Endowments support substantial student aid and student service programs, and provide funding for instruction and research, and for building and maintaining classrooms, labs, libraries, and other facilities. These funds help universities better support their students and respond to changing needs in their local communities, states, and the American economy. Under H.R. 1 potentially large amounts of endowment dollars would be redirected to the federal government, taking them away from providing scholarships to our students and supporting research and education.
The CLS is strongly opposed to these provisions in the bill. The CLS will continue to work with Congress in an effort to support retaining provisions in the tax code that incentivizes individuals to pursue a graduate education.