Dear Commons Community,

The Republicans in the House of Representatives released their new tax proposal yesterday.  While very few experts believe that this proposal will remain unchanged as it works its way through the Senate, it was natural to examine some of its details to determine its effects on personal tax situations.  In its present form, the proposal benefits corporations and the highest income earners the most.  What follows is The Chronicle of Higher Education’s analysis of the proposal’s provisions on colleges and students.  

“Republicans in Congress released their proposed overhaul of the nation’s tax laws on Thursday, including several measures that would place new tax burdens on colleges and students — and, critics said, could undermine charitable giving to higher education.

The bill was met with immediate opposition from a number of higher-education groups, which argued that the measure would rob institutions of vital dollars and increase the price of college for debt-laden students and already-strapped families.

“The House tax-reform proposal released today would discourage participation in postsecondary education, make college more expensive for those who do enroll, and undermine the financial stability of public and private two-year and four-year colleges and universities,” said Ted Mitchell, president of the American Council on Education and under secretary of education in the Obama administration, in a written statement.

In broad terms, the bill would eliminate or consolidate a number of tax deductions meant to offset the costs of higher education for individuals and companies, including the Lifetime Learning Credit, which provides a tax deduction of up to $2,000 for tuition, a credit for student-loan interest, and a $5,250 corporate deduction for education-assistance plans.

The bill proposes new taxes on some private-college endowments and on compensation for the highest-paid employees at nonprofit organizations, including colleges and nonprofit academic hospitals. The plan would also tax the tuition waivers that many graduate students receive when they work as teaching assistants or researchers.

Perhaps most significant, the bill would result in many fewer people itemizing their deductions for charitable gifts. Higher-education experts warned that that change could lead to a steep decline in donations to colleges.

Richard D. Legon, president of the Association of Governing Boards of Universities and Colleges, said in a news release that Republicans in the House of Representatives had proposed extracting money from colleges and students in their “zeal to find offsets to fund cuts in the corporate and personal tax rates and eliminate the estate tax.”

“‘Simplifications’ to current tax provisions that encourage saving and paying for college could cause great harm to the very families the legislation is purporting to help,” Mr. Legon said.

Two provisions in the legislation take aim at higher education’s most popular targets — endowments and executive compensation. But the bill’s details mean that relatively few institutions and administrators would see a tax increase.

Republicans proposed a 1.4-percent tax on the endowments of private colleges that enroll more than 500 students and that have nest eggs of more than $100,000 per student. The proposal would generate an estimated $3 billion over 10 years.

A Chronicle analysis found that the tax would apply to fewer than 150 colleges.

Still, while the number of institutions affected by such a measure would be small, the impact on how those colleges spend money could be large, said Brian Flahaven, senior director for advocacy at the Council for Advancement and Support of Education.

The tax on endowments is meant to increase spending from those reserves, but Mr. Flahaven said it would instead redirect the money away from its intended purpose to the federal coffers.

Similarly, the tax bill calls for a new tax on compensation of some highly paid employees of nonprofit organizations, including benefits such as housing and transportation, but not contributions for qualified-retirement plans.

Under the provision, a tax-exempt organization would be subject to a 20-percent excise tax on compensation in excess of $1 million paid to any of its five highest-paid employees. Lawmakers estimated that the measure would generate about $3.6 billion over a decade.

Again, the limits of the bill constrain the number of institutions that would be affected.

Fewer than 150 public and private colleges had an employee who earned more than $1 million, according to The Chronicle’s analysis.

Imposing a tax on employee benefits would put colleges at a disadvantage in competing with privately owned companies for the best employees, said Brian Pinheiro, an expert in executive compensation with the consulting firm Ballard Spahr.

“In the compensation world, this was a bit of a surprise,” said Mr. Pinheiro.

The impact of taxing endowments and executive compensation, though, would pale in comparison to other provisions in the plan, said Steven Bloom, director of government relations for the American Council on Education.

Mr. Flahaven said that about 30 percent of tax filers are now able to itemize their charitable gifts to reduce their tax burdens. The Republican proposal would decrease that number to just 5 percent, according to figures cited by the National Council of Nonprofits, and would cause giving to fall by as much as $13 billion annually.

Middle-income students, too, would feel the impact of the House bill, which proposes eliminating the Hope Scholarship Tax Credit, worth up to $1,500, and the Lifetime Learning Credit. M. Peter McPherson, president of the Association of Public and Land-Grant Universities, said in a written statement that eliminating the Lifetime Learning Credit would cause particular harm to nontraditional students and graduate students. “The current tax code helps reduce the cost of college for good reason — not just because a college education benefits individuals, but because it benefits society at large,” he said.

The bill would retain the American Opportunity Tax Credit, worth up to $2,500. The changes would increase government revenue by more than $17 billion over 10 years, according to Congressional estimates. The government would also save nearly $48 billion by eliminating deductions for interest on student loans and including things like employer-provided tuition reimbursement.

“This bill would increase the cost to students of attending college by more than $65 billion between 2018 and 2027,” Mr. Mitchell said in a written statement. “This is not in America’s national interest.”

As I said earlier, it is unlikely that this proposal will survive in its present form. We will see in the next couple of months what changes the Senate will recommend.

Tony

Dear Commons Community,

The Chronicle of Higher Education is reporting that the University of Wisconsin at Superior announced earlier this week it will be phasing out two dozen academic programs over the next five years. As reported:

“Faculty members at the University of Wisconsin at Superior said they were “blindsided” by this week’s announcement that the university was suspending more than two dozen academic programs, including majors in political science, sociology, and theater.

The programs were being phased out, the university said, as part of a streamlining process to make it easier for students to graduate on time. First-generation students, who make up 46 percent of the student body, tend to get overwhelmed by too many course offerings, university administrators said. As a result, they added, students often make bad decisions that cause them to take too many credits, incur too much debt and take too long to graduate.

No new students will be admitted into the suspended programs, but students who have already declared majors or minors will be able to finish them, the university’s announcement said.

Despite the $2.5-million deficit facing the university, the primary motivation for the suspensions was student success, not cost-cutting, administrators said.

The suspensions, which also include minors in computer science, physics, and journalism, were announced Tuesday morning at a department chairs meeting and then quickly posted on the university’s web page. The move surprised many in academe and prompted a backlash from faculty members who said they weren’t consulted first.

“Half of the offerings in my department were cut without any discussion or notification,” said Brent Notbohm, a professor of film and video and chair of the Communicating Arts Department.

“It’s left people demoralized and feeling like they didn’t have an opportunity to work with administrators to find pragmatic solutions.”

No faculty members will be laid off as a result of the suspensions, but several faculty members interviewed said they expected some of their colleagues to leave as their programs shrink.”

Contrary to what the university administrators are saying, this action seems more like cost-cutting than a student success issue.

Tony

Dear Commons Community,

Yesterday, New Yorkers were mourning the eight people killed in the terrorist attack in Manhattan.  Mayor Bill de Blasio and Governor Andrew Cuomo were all over the media providing comforting and assuring words that as a city we will not be deterred or cringe in fear.  Donald Trump, on the other hand, decided to gain political points against Democrats.  Here is an excerpt from a New York Times editorial lamenting Trump’s rhetoric.

“New Yorkers on Wednesday were mourning the eight dead from a terrorist attack in Lower Manhattan and wondering how vulnerable they and their families might be, even as they picked themselves up, as New Yorkers do, and went on with life.

Some of them inevitably thought back to another beautiful fall day in Lower Manhattan, on Sept. 11, 2001. After that day, they remembered, they and their nation were led in mourning, and toward unity, by a president who shared their sorrow and understood his own role.

The current American president reacted rather differently.

“A Chuck Schumer beauty,” Mr. Trump tweeted on Wednesday, blaming an immigrant visa program, signed into law by President George H.W. Bush and supported by Senator Schumer, for the fact that the terrorism suspect, an immigrant from Uzbekistan, was in this country as a legal resident.

Mr. Trump might instead have rallied the nation. But he could not resist resorting to his campaign fantasy that closing the nation’s borders to those whom he selectively targets is the all-purpose solution to terrorist violence. Overnight, he and the nativist media seized on the title of the program — the Diversity Visa Lottery — to portray it as a “politically correct” indulgence undermining the country, rather than affirming its core values.

“Sounds nice,” Mr. Trump said of the program, which is open to about 50,000 applicants a year from nations that traditionally send few emigrants here. But “it’s not nice,” he insisted. He called on Congress to end it.

Prompted by a question from a reporter, the president said he would “certainly consider” sending the suspect, Sayfullo Saipov, to the military prison at Guantánamo Bay, Cuba. That would be foolishly controversial and counterproductive, considering the criminal case that authorities are already building in New York. The accused allegedly left a note expressing sympathy for the Islamic State. Authorities charged him under terrorism laws, as investigators focused on whether he had meaningful ties to ISIS or other terrorist organizations.

“I guess it’s not too soon to politicize a tragedy,” Mr. Schumer said in reaction to the president’s charge that he was “helping to import Europe’s problems.” “President Trump, where is your leadership?” Mr. Schumer said on the Senate floor, pointing out that the president’s proposed budget would cut an estimated half-billion dollars from antiterrorism programs.

Mr. Trump’s distortion of the attack, in which 13 people were injured, contrasted with his reaction to the Las Vegas shooting on Oct. 1 when 58 people were murdered and hundreds wounded. “There’s a time and place for political debate, but now is a time to unite as a country,” Sarah Huckabee Sanders, the White House press secretary, declared in cutting off discussion of gun laws the day after the shooting.

This time, Mr. Trump issued a condolence tweet for victims and families, but on Wednesday cited the attack as prime evidence for his proposals to slash legal immigration in half in coming years and curtail Muslims’ ability to enter the country. “Being politically correct is fine, but not for this!” the president tweeted, and later called for “merit based” immigration and “no more Democrat Lottery Systems.”

Sad how Trump lacks any sense of presidential leadership and grace!

Tony

Dear Commons Community,

Yesterday, a driver plowed a pickup truck down a bike path along the Hudson River in Lower Manhattan, killing eight people and injuring 13 before being shot by a police officer in what was  the deadliest terrorist attack in New York City since Sept. 11, 2001.  As reported by the New York Times and the Associated Press.

“A driver plowed a pickup truck down a crowded bike path along the Hudson River in Manhattan on Tuesday, killing eight people and injuring 13 before being shot by a police officer. The rampage ended when the motorist — whom the police identified as Sayfullo Saipov, 29 — smashed into a school bus, jumped out of his truck and ran up and down the highway waving a pellet gun and paintball gun and shouting “Allahu akbar,” Arabic for “God is great,” before he was shot in the abdomen by the officer. He remained in critical condition on Tuesday evening.

Mayor Bill de Blasio declared the rampage a terrorist attack and federal law enforcement authorities were leading the investigation. Investigators discovered handwritten notes in Arabic near the truck that indicated allegiance to the Islamic State, two law enforcement officials said. But investigators had not uncovered evidence of any direct or enabling ties between Mr. Saipov and ISIS and were treating the episode as a case of an “inspired” attacker, two counterterrorism officials said.

Mr. de Blasio said at a news conference, “Based on information we have at this moment, this was an act of terror, and a particularly cowardly act of terror aimed at innocent civilians.”

Five of the people killed were Argentine tourists who traveled to New York for a 30-year high school reunion celebration, said a senior official in Santa Fe Province, where they were from. The Argentine authorities said they were Hernán Mendoza, Diego Angelini, Alejandro Pagnucco, Ariel Erlij and Hernán Ferruchi. Martín Ludovico Marro, a sixth member of the group, was wounded. Belgian officials said one of those killed and three of the injured were from Belgium.

Mr. Saipov came to the United States from Uzbekistan in 2010, and had a green card that allowed permanent legal residence. He had apparently lived in Paterson, N.J., and Tampa, Fla. An official said Mr. Saipov rented a truck from a Home Depot in Passaic, N.J., where a white Toyota minivan believed to be his was found parked.

The truck came crashing to a stop near the corner of Chambers and West Streets by Stuyvesant High School. Sirus Minovi, 14, a freshman there who was hanging out with friends, said people scattered.

“We heard people screaming, ‘gun’ ‘shooter’ and ‘run away,’” Sirus said. “We thought it was a Halloween prank.”

He realized it was not a joke when he saw the man staggering through the intersection, waving guns and screaming words he could not make out. A passer-by approached the attacker, apparently trying to calm him, Sirus said, until the man realized the attacker had a gun. The man “put his hands up and was backing away,” Sirus said.

Almost immediately, as investigators began to look into Mr. Saipov’s history, it became clear that he had been on the radar of federal authorities. Three officials said he had come to the federal authorities’ attention as a result of an unrelated investigation, but it was not clear whether that was because he was a friend, an associate or a family member of someone under scrutiny or because he himself had been the focus of an investigation.”

We add this horrendous chapter to our City’s history.  While the carnage was not as extensive as September 11, 2001, it hurts but does not dampen our spirits or our resolve to continue to live our lives.  Hours after the attack, New Yorkers — young and old — poured into city streets to celebrate Halloween in a defiant stand against violence and fear. The annual Halloween parade in Greenwich Village went on as planned but with an increase in security. Among those joining the march were New York Mayor Bill de Blasio and New York Gov. Andrew Cuomo.

Tony