AUSTIN KRIEGER | email@example.com
Recently, the House of Congress narrowly passed the newest tax overhaul program in over 30 years. The Congress’ bill, which passed to move forward to Senate who on Wednesday Nov. 29, voted to pass the bill into full consideration. The White House’ framework and the bill itself structuring the tax reform claims to center its tax breaks on businesses both large and small, as well as middle and working-class families. The intended result will be growing the American production market, in turn raising wages and creating opportunities for more work in the US.
Repeal of student loan deductions
According to the bills section on tax deductions, most itemized deductions will be removed from the tax program, which is one of the leading concerns for people middle and lower class, including students. Student loans are one of the many places it is possible to receive deductions currently but is also one of the deductions aimed to be removed by next year. Currently students receiving federal loans can opt to deduct $2,500 yearly in loan interest. This deduction provides students the opportunity to save more of the money they make while working and attending school.
Graduate endowment tax
Additionally, another higher education reform includes the taxing of graduate program tuition coverage. Often, graduate students will receive tuition reductions or full tuition endowments, and a stipend pay for working as a research assistant or teaching assistant at the university they are studying at. Previously, students were only taxed on the stipend income for their work, but the reform will add tax to the money received to cover tuition as well. This new tax could lead to concern for large universities with large graduate programs.
Effect on middle and working-class students
While overall tax cuts will be made to every bracket, the largests cuts still remain in the highest wage bracket. The new bill outlines hope in a plan that by lowering taxes for businesses they will be able to grow and prosper and eventually return the prosperity to the middle and working class. The bill includes a more simplified tax paperwork system, and yet many more repeals of deductions such as those for moving expenses and medical expenses.
Most notably, students who fall into middle and working class would be part of a substantial tax break in an overall sense. Although, the concern and center of debate between parties is the repealing of most tax deductions available to citizens. Deductions such as the ones many students can claim for student loans help to support low income students while attending college. After being voted into full consideration, the bill will undergo several sessions of deliberation and be subject to many amendments. The full effect of the complete overhaul will be seen when and if the bill is voted into law.