[klipt]

It seems like the Republicans are applying double standards here to universities vs regular businesses. Businesses can reimburse employee expenses, deduct those from taxable revenue as a business expense, and the employee doesn't have to pay tax on the reimbursement.

Grad students are essentially employees of the university, if they're being reimbursed tuition costs why should they have to pay taxes on a reimbursed expense when other employees don't?

[bklyn11201]

An employee does not gain taxable income by driving to a client site and being reimbursed $0.535 per mile by the company as they have used fuel and have caused wear on their vehicle. But if the company decided to purchase an employee a new personal car at the end of the year as a bonus, that would be taxable compensation.

The university has decided to declare a tuition of $50k per year. So charging one student $50k and then providing the rest of the students with a reimbursement, is seen as a gift similar to your employer gifting you a car. The university could choose to set tuition at $5k per year instead and with a little bit more grad student pay and the tuition tax deductions, it should all be even.

[jrs95]

Because businesses pay people who vote Republican, and universities pay people who vote Democrat. That's a bit of an oversimplification of course, but that sort of thing is always in play. Both parties tend to have biases that conveniently align with the demographic that votes for them or supports their ideology.

[CWuestefeld]

We're not talking about expense reimbursements, though. They needed to be able to show that we have some number of certified AWS architects, so I paid $150 for an AWS certification test, and my employer is reimbursing me. They get the credentials they want, and I was made whole.

In this case, it's not that the grad student is getting to take classes (this is tuition we're talking about, remember) for the university, nor is it that the school is benefiting from the student taking classes. That's something the school is providing to them as a service for a cost.

What the schools and grad students are trying to do is to barter their way around taxes: "you give me tuition, I give you some TA and research work", and no (or minimal) money changes hands. That the tax code allowed this was a loophole: in general, you're responsible for the value that was received, not just the dollars portion.

This is even part of ObamaCare: I have to pay tax on part of what my employer pays for my healthcare, even though it was never given to me in any monetary fashion. (the reason it's only "part of" is one of the great tax engineering f-ups, leading to the disaster that is our current system of health insurance)

Even campaign finance law recognizes in-kind services as being equivalent to the dollars they'd otherwise be worth. If your airline writes off the cost of the candidate's cross-country trips, for example, the value of those tickets would count as a campaign contribution.

[klipt]

> In this case, it's not that the grad student is getting to take classes (this is tuition we're talking about, remember) for the university, nor is it that the school is benefiting from the student taking classes.

Why not? The grad student's real job is research. The tuition is for classes to make them better researchers.