Introduction
University students in the United States are often burdened with several responsibilities and expectations. Students have to contend with the burdens of starting their careers, difficult and tasking course works and strained financial circumstances. Furthermore, university students often start discovering about the realities of being an adult during their tenure as scholars. Most students also face the issues of taxes, lifestyles, and income levels when they are pursuing their university education.
Taxation applies to all citizens in the United States directly and indirectly, including university students. However, as per America’s constitutional spirit, the level of taxation varies depending on an individual’s social and economic outlook. Currently, University students pay taxes in several forms. This is despite the fact that University students face several economic, social, and lifestyle handicaps. The payment of taxes by university students undermines several scholarly, developmental, and personal issues.
Students pay taxes for several years, and this move is often prompted by the argument that the government provides valuable services to university scholars. In addition, it is argued that students are free to earn money just like the rest of American citizens. However, doing away with student-taxes would be of great benefit to students and their guardians. Some of these benefits are of financial or educational nature. This paper is a proposal against the payment of taxes by university students.
Overview of the Problem
The problem of double taxation
Most university students are not self-sufficient, and they have to depend on their parents and other guardians for financial support. Consequently, several students operate on ‘hand-outs’ as they do not ‘make’ any money. Taxation seeks to focus on the people who make money and not on the liquidity of individuals. Nevertheless, parents and guardians give money to their children after the government has already taxed this income.
On the other hand, university students do not use this money for any other purpose except for catering for their subsistence and fees-payment. For instance, students do not engage in any income-generating ventures using the money that they are given by their parents and guardians. Using this argument as a preamble, it would be justified to consider this move as ‘double taxation’ of students. Students cannot receive tax returns because of their parents’ tax remissions.
According to the Harvard University’s student information website, you can only “file for a Federal income tax return if you receive a specified amount of gross income for the calendar year” (Federal Information for Domestic Students). Most students do not satisfy the requirements of qualifying for a tax return based on their income levels. In most cases, taxing students becomes double taxation because students pay taxes on money that had already been taxed through their parents.
Students do not have regular income
The reasoning behind taxation is that citizens pay taxes to ensure that the government is able to preserve conditions in which they (citizens) can make money. Therefore, it is a general assumption that everybody who pays taxes is able to generate income. Students spend most of their time studying and barely have time for income-generating activities. Additionally, the country depends on university students to sustain their future economic growth. Even students with part-time jobs do not meet the criteria of regular income earners.
For instance, part-time students have to have approximately four hours of studies a day. Intensive studies often leave the students exhausted and with little energy for other activities. According to the Harvard University student information website, students are required to file tax returns if they are of legal age.
Furthermore, the website outlines the income limits for filing tax returns as “$10,000 for single students, $20,000 for married students who file joint tax returns, $12, 850 for the head of a household, and $16,100 for widows/widowers” (Federal Information for Domestic Students). None of these remission guidelines considers the students’ welfare. Research has shown that students who earn more taxable levels of income tend to be from poor backgrounds (Canadian Centre for Policy Alternatives 1).
Students from poor families try to compensate for their disadvantaged financial backgrounds by working extra hours to pay for their tuition, among other needs. Therefore, taxing university students works against the institution of higher education by degrading the quality of education for the individuals who need it most.
Tuition fees
The tuition fees that are paid by university students are already high enough, and they are quite similar to taxes. For instance, the tuition fees for public universities go towards ensuring that students receive a quality education. Similarly, taxes are meant to improve government services. Therefore, it is quite justifiable to make the argument that tuition is just another form of taxation. Consequently, students who pay tuition should not pay an additional form of taxes to the government.
Private universities pay taxes to the government, and it is included in their tuition fees. Tuition fees are particularly harsh on students from the bottom 25% income percentile (Canadian Centre for Policy Alternatives 2). For instance, the number of students from low-income families who seek university education is significantly lower than the number of students from high-income families. Despite the level of income for every student, they have a burden of paying tuition fees.
The government has taken several measures in an effort to ease access to university education for students from low-income families. For example, the government offers loans and educational bursaries to students from low-income families. Adding tax-exemption to this list would make university education more accessible to such students.
The Canadian Center for policy change indicates that “the fourth (highest) quartile accounts for a smaller proportion of college and university students than it does of total income, so the highest-income (25% of families), through their contributions to the tax system, in effect subsidize tuition of the lowest-income half of families” (Canadian Centre for Policy Alternatives 13).
There are concerns that exempting certain groups from paying taxes amounts to unfair practices. Therefore, a blanket tax-exemption for all university students should satisfy the needs of all scholars.
Proposed Solutions
The solution to double taxation
To avoid instances of double taxation of university students and their parents, the United States should institute tax laws that consider the relationship between the two parties. For example, the government should subsidize either the taxes that are paid by guardians or the tuition that is paid by students. More comprehensive tax subsidies will ensure that instances of ‘double-taxation’ between students and their guardians are eliminated. Another solution to the problem of double taxation is making tuition payments tax-deductible.
This move will ensure that students recoup their tax payments through institutional deductions. In 2013, the tax-filing period saw students to file tax returns on expenditures that were paid by their guardians. Therefore, a review of the existing tax laws would ensure that university students go about their studies without harboring resentment for the country’s tax regime.
Other solutions
The Harvard Student Information website indicates that filing of income taxes is mandatory for almost all students who have a subsistence income of over $10,000 (Federal Information for Domestic Students). However, the website notes that students are illegible for certain types of tax deductions as specified in the United States’ tax laws. These laws can be changed to prioritize the income levels of students when considering university scholars for education credits and deductions.
The Harvard website indicates that in the last one year, university students have been illegible for tax deductions on their student loans’ interest and tuition fees (Federal Information for Domestic Students). Nevertheless, none of these deductions covered the amount of more than $4,000. The limits on tax deductions should be extended to cover reasonable amounts of money.
This move would offer a solution to the taxation of low-income earners. In the United States, the government also offers lifetime learning credits and the American opportunity tax credits. These two credits ensure that the welfare of the working American students is considered in the tax regime. These credits are adequate, but they have not been able to eliminate the disadvantage that low-income earning students encounter in their quest for university education.
Justifications for the Solutions
University education used to be a privilege of the rich a few decades ago. The government stepped in and tried to even out the disparities in university education that are as a direct result of income differences between students. However, the strains of work-study problems are starting to reverse the gains that have been made by the government through tax breaks and credits. Doing away with student taxes would ensure that the scholars and those who pay for their fees enjoy the benefits of the American tax system.
Conclusion
There are several arguments against taxing students. Most of these arguments are aimed at ensuring that the quality of university student remains intact. Eliminating student taxes would ensure that the guardians are not exploited and students from low-income families enjoy their university studies.
Works Cited
Canadian Centre for Policy Alternatives 2013, Learning and Earning. Web.
“Federal Information for Domestic Students” Harvard University Student Financial Services. 2014. Web.