As the Senate and the House debated proposed tax-overhaul legislation in November, a pair of provisions were of particular concern to Princeton officials:
- A proposal to impose a 1.4 percent excise tax on net investment income at private schools with endowments larger than $250,000 per student. If it were enacted, University spokesman Daniel Day said, the expected impact on Princeton “would be quite large, likely in the tens of millions of dollars per year.”
- A plan to tax the tuition waivers for graduate students who work as teaching or research assistants. If their tuition were counted as taxable income, The Chronicle of Higher Education reported, “graduate students could find themselves paying taxes on a far greater amount of money than they actually receive in paychecks from their college.”
President Eisgruber ’83 told The Washington Post that Princeton was “deeply concerned” about the proposed endowment tax. University officials pointed out that the endowment supports more than half of the annual operating budget and supports financial aid. “There’s a basic principle at stake here,” Eisgruber told the Post: “You should not tax charity to raise revenue.”
David Walsh, a Princeton Ph.D. student in history, said his tax bill could jump by nearly $10,000 if the tuition waiver were no longer tax-free. Most doctoral students across the country “would see their tuition support taxed as income for at least part of their graduate careers,” Walsh wrote in the Post.
As this issue of PAW went to press, University officials were reaching out to members of Congress as higher-education institutions mobilized to oppose the tax proposals.