Last week, House Republicans passed their tax reform bill. The Senate version of the bill passed the Finance Committee the same night and is waiting to be weighed by the full chamber. Their bill may pass as early as the week following Thanksgiving. According to the New York Times, the median family income of a student at Milligan College is $81,100; the median household income in the US overall is between $55,000 and $60,000. The tax cuts in the bills will both expire after 10 years. After 10 years, middle-class families who saw their taxes decrease may see them increase to higher than they were before. Under the House bill, families at Milligan may see a slight decrease in income taxes, however many may see no difference at all. Additionally, under the Senate bill, families who earn the median nationwide income will see an increase in income taxes after the first 10 years.
President Bill Greer has sent an e-mail showing concern for how the bill may affect Milligan College. The memo included with the e-mail begins by stating, “The proposed Tax Cuts and Jobs Act will directly damage higher education in this country.” It also says that changes made will increase the cost of college as well as student debt. Three penalties against students that are specifically pointed out are: the repeal of the deduction for interest on tuition loans, the repeal of the Hope Scholarships Tax Credit, and the repeal of the Lifelong Learning Credit.
Grad students may be affected the most. Forbes says that grad students who live off of teaching or research assistantships will now be taxed for their stipends. These stipends will be considered taxable income, and students may be taxed up to $10,000 depending on their state and education institution.
Representative Phil Roe said that, “This bill will help Tennesseans keep more of their pay and relieve the stress that comes with filing taxes and navigating a bloated, complicated tax code.” Speaker of the House Paul Ryan says that it will be easier to file taxes using their “simple, fair ‘postcard’ tax filing.” This allows you to file taxes on a form the size of a postcard.
The Senate bill will increase insurance premiums by repealing the individual mandate within the Affordable Care Act, which will affect the poor and middle class the most, while the House bill may positively affect middle-class families for the first 10 years. A report by the US Chamber of Commerce found that the House bill would create nearly 20,000 jobs in Tennessee and raise after-tax income for middle class Tennesseans by approximately $2,259. The standard deduction will rise from $6,350 to $12,200. However, personal exemptions will be eliminated and Child Tax Credits will also raise from $1,000 a child to $1,600. Many opponents say the bill primarily helps the upper class and corporate businesses. The House plan will also add an increase in deficit spending by $1.4 trillion. It is not yet clear how they plan to compensate this loss in revenue.