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Why the Republican Party Wants to End the Adoption Tax Credit and Tax Graduate Tuition Waivers

Some people are asking what Republicans are thinking in their latest tax proposal. I submit that they know exactly what they are doing and why.

I. The Adoption Tax Credit

Adoption statistics are hard to find, but here are some of relevance:

In 2008, 135,813 children were adopted in the US in all types of adoption…
Adoption from foster care accounted for 41% (55,303) of all adoptions in 2008. In 2000, they made up 40 percent of all adoptions.
International adoptions accounted for 13% (17,416) of all adoptions in 2008. In 2000, 14 percent of all adoptions were of children from foreign countries.
Other adoptions (private adoption from adoption agencies or adoption attorneys, tribal, step parent) accounted for the rest—about 46% (63,094) in 2008.  In 2000, they accounted for approximately 47 percent of all adoptions. [Vik: bullet points removed]

To repeat, 14% of adoptions are of foreign children. None of these children have done anything to earn their citizenship, yet they will all be granted it. Further, many of them have health or behavioral issues that impose demands on the US health and education systems. These are costs not borne entirely by their parents but instead by the public as a whole.

40% of adoptions are transracial. This is a shocking statistic considering people still greatly prefer to marry within their own races:

Image showing interracial marriage rates are low

From Wikipedia

This is borne out in my personal experience. I’ve noticed in the schools that my daughter attends that whatever racial diversity is present there tends to be there as a result of adoption. 75% of US-adopted non-white children join families with white parents.

In general, we adoptive parents have means. We’re professionals who have the means and social capital to come up with perhaps $50,000 per kid just to get through the adoption process. After that, we invest heavily into our children’s educations and development like the relatively well-off people we are. These investments by predominantly white families are sent primarily to benefit foreign children and children of color whose parents haven’t made those same investments.

II. Taxing Graduate Tuition Waivers

If you pay tuition as a PhD student, you are getting screwed. I know an embarrassing number of PhDs, and none that I can think of have ever paid any tuition. That there is even a nominal tuition charge listed on school websites but never billed or collected is probably for accounting reasons.

Who benefits from such waivers? Generally, not masters and professional degree students, who don’t receive them. Doctoral students are the ones getting waivers. Who gets doctoral degrees? Well,

In 2014, close to one-third (29 percent) of doctorate recipients were temporary visa holders (mostly on F-1 visas), according to the National Science Foundation’s Survey of Doctorate Recipients. While the share of temporary visa holders among doctorate recipients in education and humanities programs was relatively small (10 percent and 13 percent, respectively), they represented roughly half of doctorate recipients in engineering (52 percent) and physical sciences (42 percent). China (including Hong Kong), India, South Korea, Taiwan, and Canada were the top five origin countries of temporary visa holders earning doctorates at U.S. colleges and universities, accounting for 62 percent of foreign PhD students.

III. Connecting the already-adjacent dots

The adoption tax credit and graduate tuition waivers are hallmarks of multicultural policy. They are engines of globalism at work in the United States right now. They bring people who would not otherwise have become Americans and deeply embed them into American society, changing it irrevocably. And that’s before those immigrants have kids of their own. The process is difficult enough to reverse that even the president is having trouble imposing a travel ban to partially curtail it.

The modifications put forth by the Republican tax proposal accurately represent what they desire. The party is currently a nationalist party standing against globalists. While they might not be able to stop undesirable adoptions or ban foreign graduate students in a tax bill, they can make the things they find distasteful and destructive to their idea of the core American identity a bit more expensive than they would otherwise be.

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Vikram Bath is the pseudonym of a former business school professor living in the United States with his wife, daughter, and dog. (Dog pictured.) His current interests include amateur philosophy of science, business, and economics. Tweet at him at @vikrambath1. ...more →

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49 thoughts on “Why the Republican Party Wants to End the Adoption Tax Credit and Tax Graduate Tuition Waivers

  1. In some cases, graduate tuition waivers are already being taxed and have been for several years. To my knowledge, the waivers subject to taxing were those that (allegedly) did not have research or TA’ing as their primary purpose. I.e., someone hired as a GA to work for a dean’s office would have to pay a tax on the waived income. And (ahem) GA’s hired to work in university libraries did, too, unless they could demonstrate their jobs primarily concerned research. I assume, but don’t know, that GA’s hired for IT-related services are subject to the tax, and anecdotally speaking (to my experience) those people tend to be international students.

    This might depend on the school. When I was a GA, I started getting taxed (to the extent of receivinga $0.00 paycheck) when the payroll department issued an “interpretation” of how the tax code applied. So maybe what I’ve described is not true of all schools. I will say that while the whole ordeal was inconvenient and distressing, I did see the rationale behind it. The tuition waiver is, at least on paper, a huge grant of money.

    None of that necessarily challenges your analysis. I have nothing to say about the adoption tax credit, and I haven’t looked at the Republican plan to tax waivers. And of course, you can still be right about the Republicans’ motivations.

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    • I should lay my cards out on the table and say that while I think taxing waivers are probably not a good idea, I can see where the motivation comes from and I believe the appeal of taxing waivers it’s not wholly about anti-multiculturalism, although anti-multiculturalism could very well be the Republicans’ motivation.

      The waivers are a pretty big benefit and are going to people who will probably gain quite a lot from their advanced degrees. (I’d say the benefit accrues more to the engineering and physical science students than to humanities and social science students, but the latter receive a pretty big benefit, too.) I realize, as Vikram hints in the OP, that the nominal tuition rate, which doctoral students rarely pay in full,* is largely there “for accounting purposes.” But the nominal rate is indeed what it is, and it’s real enough for students who have to scramble for an assistantship to avoid paying it.

      Again, I’m not saying taxing tuition waivers is right or a good idea, just that the motivations for doing it are not necessarily anti-multiculturalism even though anti-multiculturalism is probably one motivation. And I have nothing to say about the adoption tax credit other than ending it is probably a bad idea for a party that wants to encourage people to adopt.

      *I have, however, known a few (in the humanities) who have paid it in their first year before getting an assistantship. In my program, I paid the nominal rate for a few semesters. However, it was a much lower rate. You could register for sharply reduced hours after having earned all your credits. But even though it was much lower, it “nominal” in the sense that it was available for all who qualified and not part of the assistantship lottery.

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      • The people getting waivers now, if they stand to make sizable incomes in the future and they stay in the US (or, like me [1] are US citizens), will eventually pay higher taxes than they might otherwise.

        I don’t remember my waivers being taxed but then again I was a TA, and also, several years I made little enough to qualify for an Earned Income Tax Credit. (I only made it through grad school without having to take on an extra job or take out loans because my parents let me live with them and they fed me.)

        I dunno. It doesn’t affect me greatly now because where I’m at we have v. few grad students (though we may wind up with fewer….most of ours do NOT TA as we have no budget for that). But sometimes it’s hard not to feel like the various governments are trying to kill off most higher-ed, and maybe just leave the Harvards and other private expensive schools.

        I really do feel as if I am working in a dying industry, and I would be unwilling to bet much that I make it to retirement age (12-15 years) with academia still a valid work option :(

        [1] Though I’m not sure roughly $60K a year counts as “sizable.” And yeah, that’s about what I make as a full professor with nearly 20 years of experience. And I’m lucky to be making that much, i think, in the state where I live.

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        • FWIW you make about twice what I make in my chosen employment, with nearly 20 years of experience, 10 of it in this exact job. (I *could* go out and make more, should I feel the pinch more than I feel the love of the career, thanks to my loan-free masters’ degree, but most in my career do not have that option.)

          Which I mention only to point out that professor is far from the lowest-paid job in the generally weird employment world of academia.

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          • yeah, but, neither am I “overpaid,” as the commentariat is fond of saying. (I make about 1/3 of what the average is, according to The Chronicle of Higher Ed).

            I dunno. I wish I didn’t regularly feel disrespected. Scrimping and saving would be less soul-killing then.

            I dunno, though. I am in one of my regular cycles of questioning every choice I have made in my life.

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            • Yeah, I don’t think you’re overpaid at all. Just be extra-nice to any departmental admins, front-desk library workers, etc., that you don’t know what they’re making. (You probably are already.) ‘Cause if your school is that tight with dough where you’re concerned, they’re probably paid even less than I am.

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              • I can’t help but be nice; it was how I was raised.

                I just wish more people were raised like that. I had a student who is chronically late with things just snark at me for not having the grades posted yet for the exam they took midday Friday.

                Like I said: I feel disrespected every day.

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          • I’ll add that there was a time in my life when I thought $40,000 was “sizable.” The most I made (in nominal dollars) before my current job was back in early 2000, when I made about $25,000 per year back in Cherryplatte. I don’t know what that is today adjusted for inflation and the relatively (to Big City) low cost of living there.

            At the same time, I don’t want to make light of how low $60,000 a year can seem. My wife and I, combined, make almost twice that (and we don’t have kids and knock on wood, we’re healthy). Even with that advantage, we find it difficult to manage finances sometimes. At our income level, that’s totally on us and the choices we make, of course, and I’m definitely NOT complaining (and while things are probably more expensive in Big City than where you are, they’re not so much more expensive as to obviate the advantage of that huge income).

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            • This brings up a good point about what simple numbers mean in terms of high/low/middle for wages. It really depends a lot on where you live.

              I have this conversation with friends who came from the Midwest, like me, and now live in high cost-of-living areas. For instance, someone who is a GS14 and stationed at headquarters for her dept in the govt. She’s making a salary that puts her well above average, but can barely afford a one bedroom 600 sq ft condo in DC because the ridiculously high cost of housing, food, local taxes, etc. Her family is mostly in small town Iowa though and absolutely cannot understand how she isn’t rolling in money.

              I see the same from a couple who both work in the police dept in SF. They are making in salary roughly what my husband and I (both engineers with 25+ years experience) make BUT while we can afford a nice home with a big yard, they are still saving but starting to despair of ever buying even a small condo since the prices within any semi-reasonable distance for them are well over half a million.

              I have absolutely no idea how people making much lower salaries survive in those areas. Though my GS14 friend has told me that as a GS9 she basically went in with 6 other other people on a cheap 2 bedroom apartment in a not-completely-scary part of town so that they could afford the rent.

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              • This is one of those things where economics seems to work funny. One would think that a high tax burden, be it federal or SALT, would keep the prices associated with COL down, but it doesn’t appear to have that effect, so you get lots of people making middle class wage/salary who can not live in certain areas as middle class residents.

                Is there a signal failure? Where is JamesK or Brandon Berg?

                As an aside, I really do wish federal taxes would take certain COL of living factors more into account if we are going to continue as we are (with all the deductions and credits and whatnot).

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      • I greatly prefer a simplified tax code which wouldn’t aim to chop off different forms of compensation. So, ideally, waivers as a form of compensation (which they pretty clearly seem to be) ought to be taxable.

        But they’d be far from the first place I’d begin that reform effort.

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    • Interesting, I think the accounting rule is that for a GA you are an employee who is getting a benefit of an Education Waiver… hence it is a perq and per accounting rules must be counted as income.

      I can’t say what the accounting principle is that allows researchers to not have their education waiver counted as income… but there’s likely some thing which makes it different.

      And perhaps the accountant who clarifies the above could also comment on whether Universities could simply lower PhD tuition to, say, $5,000. As Vikram states, “If you pay tuition as a PhD student, you are getting screwed.” So, there’s no real reason to charge large fees for PhD tuition unless, a) you are employing the sticker price idiot theory of sales, or b) you really are underpaying employees and dangling graduate credits as an unattainable goal to keep them underemployed, or c) you accidentally fished yourself with VSOP/VSOE accounting rules and you have to keep a very high list price on tuition, even if no-one pays it; or d) some other reason.

      We should probably leave open the possibility that the Universities themselves might hold the key to solving this problem.

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      • Interesting, I think the accounting rule is that for a GA you are an employee who is getting a benefit of an Education Waiver… hence it is a perq and per accounting rules must be counted as income.

        I think that’s a theory. I believe it’s technically an IRS rule and not an “accounting” rule.

        I can’t say what the accounting principle is that allows researchers to not have their education waiver counted as income… but there’s likely some thing which makes it different.

        Referring to the IRS rule as I understand it (and if I do understand it right, it might have changed), the rule says that assistantships based principally on teaching or research are exempt.

        perhaps the accountant who clarifies the above could also comment on whether Universities could simply lower PhD tuition to, say, $5,00

        I’m not an accountant, but I understand the same IRS rule exempts other assistantships (i.e., ones not focused on research or teaching) up to the amount of about $5,000 (maybe a little more). So when waivers are taxed (again, per my understanding ca. 2010), the taxing is on only that amount worth more than $5,000. In my case, the out-of-state tuition per semester was about $10,000. So two semesters of waivers meant about $20,000 – $5,000=$15,000 taxable income. The reason I got $0.00 paychecks was because taxes were withheld on the basis of that $15,000.

        b) you really are underpaying employees and dangling graduate credits as an unattainable goal to keep them underemployed,

        In my experience, we were paid pretty well, or the equivalent of about $20 per hour, 20 hours per week. I am aware that graduate employees at other institutions aren’t paid as well (or paid comparably, but with only 10 hours per week).

        c) you accidentally fished yourself with VSOP/VSOE accounting rules and you have to keep a very high list price on tuition, even if no-one pays it; or d) some other reason.

        That might be part of the problem although I don’t really understand VSOP.

        We should probably leave open the possibility that the Universities themselves might hold the key to solving this problem.

        I suspect there’s much a university could do. In my case, the whole situation of taxing certain waivers might have been more the result of an overly (or adequately?) risk averse payroll department. The rumor at the time was that we were one of only a few colleges/universities that interpreted the IRS code that way. I have no idea of that rumor was true or if the IRS rule really was so open to interpretation.

        In terms of other things the university could do besides taking a risk with the feds, I have a couple ideas. As a public university, there was a wide differential between being an in-state or out-of-state student. Yet the residency requirement was stringent to the point of making it almost impossible to become a resident. Perhaps the university (however, it might be a decision for the legislature instead) could make residency little less difficult to obtain after, say, the fourth year of a program. Also, as I mentioned above, I was later on able to pay for a lower credit course load designed for people who had completed all their coursework, but even that was very pricey. Maybe there was a way to reduce it? (Or not….I don’t know the finances enough.)

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        • On Marchmaine’s last point, I think what he is getting or at least I would argue is that if most people don’t pay for graduate school because of waivers, there is no market price for graduate school. Internal accounting rules don’t determine market price. It may be useful to know that an English undergrad student is costing +1 % over tuition paid, while an anthropology undergrad student is coating -1 % under tuition paid, but the school is free to charge whatever it wants.

          And if for example the sticker-price on the waiver is $20,000 and people are unwilling to pay the $960 in taxes, then the market price of the waiver is less than $12,000.

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          • Right… and VSOP may be entirely the wrong concept – its something I deal with in Software/Services so that’s my reference point.

            Basically a company cannot give something away for free if it has a historical practice of charging for it (I mean it can, but it comes off the books somewhere else)… but what is the historical rate for Grad Tuition if no one pays?

            At some point we’re dealing with a fictional account that the University wants to maintain for some other reason than collecting fees from Grad Students… which probably ought to be dealt with by changing their business practices and not a Tax Expenditure.

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  2. The adoption policy proposal change strikes me as a prime example of how flawed both parties are in the u.s. system…

    Adoptive parents have mostly been driven to go outside the country by the mountain of regulations created by the Left around the adoption process. I learned firsthand about this when some close friends of ours went through the adoption process several years ago. They wanted to adopt domestically, and weren’t very picky about the race of the child. But when faced with the mountain of regulations, the possibility that they could go through a lengthy fostering process and still not get the child, and lots of other social-worker type hoops to jump through, they chose to look internationally. It was still an expensive process, but much shorter and a 100% success rate if completed.

    I know that all of the domestic regulations were put in place with good intentions, but they have had terrible results. This was actually a point in John McCain’s campaign in 2008. He wanted to radically change the adoption process in the United States to encourage more families to adopt domestically.

    So the Left got the ball rolling by dramatically increasing regulations, and then conservatives have now, many years later, suggested an incredibly stupid policy change to prevent people from going abroad for adoptions. They would simply look at domestic adoption policies and tried to streamline the process, and make it more affordable, they would do much better work and actually help the families they claim to care about.

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    • I dated a few women who had adopted kids since they “hadn’t found a man to have kids with and would wait no longer”. Their comments support your comments about the state of adoption of kids in this country. They both ended up choosing foreign adoption.

      As for the tax issue, I have no real issue with removing a tax benefit for someone who’s going to bring into this country a burden on the public coffers. If anything, this would “nudge” people to adopt domestically, and aren’t liberals all about supporting nudging?

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    • We’ve toyed with the idea of adoption since we can’t have anymore kids (Bug was the one & only), and the tax benefits are small potatoes against the regulatory hoops one has to go through without any kind of guarantee you get a child in the end.

      I mean, 3 cycles of IVF probably cost more, but we knew the odds, and understood that if it failed, it’s was because nature isn’t fair. There is just something about knowing that an adoption could fail because another person changed their mind (be it the mother, or a social worker, or a judge) that makes it a hard pill to swallow.

      Honestly, if I had to put it to words, I’d say that it’s because it feels like the system throws your generosity back in your face. No one goes into an adoption for purely selfless reasons, but the fact is that you are willing to open your home, your heart, extend your resources, to a child that is not yours, and the amount of work one has to do just to even be considered, and then to accept the reality that it might never happen…

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  3. Yeah, I don’t know about all that.

    But, if there’s one thing to like about the proposed tax legislation is that it starts moving in the direction of eliminating tax expenditures as policy. There are, of course, several reasonable arguments in favor of tax expenditures, efficiency chief among them, and I’ll grant several of those arguments; but still I would favor reducing tax expenditures. You could even point out that the current tax proposal doesn’t get rid of *all* tax expenditures, and therefore is inconsistent (nay hypocritical), and I’d agree that it doesn’t, and maybe it is. But I’m not, and wouldn’t argue that only the expenditures I like should stay; I’d rather they were all going away… even if maybe in a phased or slow approach. So the principle that we don’t enact policy through Tax Expenditures is something I’d rather us do… even at the cost of efficiency.

    But, I’m not saying that this tax proposal does it well, even if it does some things I think we ought to do; as a bleeding heart Catholic Social Con, I’m perfectly happy to remove the tax expenditure for adoption and simultaneously revamp our approach to adoption, foreign and domestic, that would also include the same (or more) funds to improve the adoption rate and experience. It might, it probably should, cost more than a tax expenditure… but that’s one of the reasons I don’t like them as policy proxies; they aren’t really good policy, and often they are not policy at all, but payback and a form of general congressional temptation/corruption.

    I’d rather Congress go through the process of delineating a public policy, setting goals for success, and funding those policies and programs; ideally for 5- or 10-yr periods with subsequent renewals and adjustments. Now typical of the modern Republican party, it does one thing (cut expenditures) without the other (subsidize social programs) so on that front I’d be fine with criticism and a good argument over whether subsidizing adoptions is more or less important than subsidizing some other good. But I’d rather start with the premises that are stated goals of the tax plan (like reducing expenditures) rather than guessing a motivations that are more complex and totally unsubstantiated than the simple stated reasons.

    [But then, I also think Congress ought to be the proper authority for authorizing war and (non-emergency) military action… so I’m a hopeless dreamer]

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    • The problem is why these tax expenditures are being eliminated though and those are to support massive tax cuts for corporations and inherited wealth. This is the Kansas Experiment on massive scale and massively unpopular. Along with cuts to how much people can put in 401ks, the GOP seems hellbent.

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      • That’s fine to argue, but its a separate argument. You could also remove tax expenditures as a policy goal and increase tax revenues as another policy goal.

        But yes, the plan is to reduce tax revenues and pay for some of that by also reducing tax expenditures is true. I’m not sold on the animus argument that Vikram isn’t so much as making as insinuating.

        Your friends at MR just happen to look at the Tuition Tax waiver today and float two slightly different accounting principles: 1) When attached to Faculty benefits it is indeed revenue, but 2) When offered to an individual, it shouldn’t be treated as income at all… so no waiver needed.

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      • Also true… though I’d broaden the comment to just plain, Congress doesn’t do process anymore.

        But that’s why I’m not terribly impressed with this as Tax Reform, so much as just another half-baked tax cut with accidental tax reform elements. I’m ok pointing out that the Donor class gets theirs and the rest will pass on a bill to future selves… but that’s just more proof that there’s no Trumpism, just Trump and that the Republican party qua party is dead. What happens in 2018/20/24 is open to speculation.

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  4. 75% of US-adopted non-white children join families with white parents.

    This strikes me as one of those stats that needs a lot more stats.

    What are the demographics of people in the US who want to adopt?
    (Heck, how many are there? What percentage of the US is this?)

    What are the demographics of adoptable babies available in the US?
    What are the demographics of adoptable babies available in the world?

    (Does “supply/demand” explain a lot of this stuff?)

    I suppose it’s worth asking about how important it is that parents of one ethnicity are raising children of another ethnicity… but that seems like a can of worms. If we can agree that it’s a moral issue, we can hammer out the obligations that this ethnicity has to that one that scale down to parent-child level relationships.

    (Hey, wait a second… tackling adoptions between people of different ethnicities might also be a blatant attempt to get nuttier members of the college left on board. What is the adoption of a child from another part of the world but the ultimate form of cultural appropriation?)

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      • I believe that I don’t know the answers to the questions I asked.

        I also believe that exploring the issue of the importance of people of one ethnicity raising children of another ethnicity is a can of worms… but if we’re willing to open it, we could, indeed, hammer out the inter-ethnic obligations that we have to each other.

        I do not believe that the adoption of a child from another part of the world is cultural appropriation.

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  5. Well, I just want to note that academics are not exactly a prize constituency of the Republican Party these days. So if some tax expenditures are going to go down the tube but not others, there’s not going to be a lot of people speaking up for grad students in those committee meetings.

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    • Yeah, we’ve seen the polls that a majority of their base think college is a bad thing. And yet, per the CRS, 94.1% of House members and 100% of Senators in the 115th Congress hold bachelor’s degrees. 60% of House Members and 76% of Senators hold degrees beyond a BA/BS. 37.8% of House members and 55% of Senators hold law degrees. These numbers are all significantly higher than they were a generation ago.

      OTOH, most of the Congress critters are wealthy enough that if their kids want to go to graduate school, Mom/Dad can finance it for them.

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  6. Post Hoc, Ergo Propter Hoc.

    I will guess that William of Occam and his lovely razor has more to do with this than any nationalist desires. Remember that the current GOP makeup has not been completely “infected” with Trump. The R’s have always talked about cutting taxes and here they are, cutting taxes. Is your ox getting gored? How about the people who want to write off over 500K of mortgage interest? Surely that holds a lot of R votes?

    The gov’t gave out tax credits like cheap candy on Halloween in order to nudge people in various directions, well now its simplification time (while holding some oxen sacred…unfortunately.)

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    • I’m really kind of OK with the mortgage exemption cap. I’m a liberal, I think progressive taxation is a good thing, in general. I’m not so sanguine about repeal of inheritance tax. Those arrows are not pointed in the same direction, I note.

      Also, I wonder why we shouldn’t raise the cap on FICA contributions.

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  7. The interracial marriage stats are misleading because they are dominated by people who’ve been married for decades. From the same wiki:

    Among all newlyweds in 2008, 9% of whites, 16% of blacks, 26% of Hispanics and 31% of Asians married someone whose race or ethnicity was different from their own.

    In truth, very few American whites marry someone of the same ethnicity. There are English marrying Germans and Germans marrying Poles and Poles marrying Swedes and Swedes marrying Scots. It’s just crazy. I have no idea why they single out Hispanics and not Italians or French as being ethnically different..

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  8. I’m going to agree with what some have said above, in that these tax credits were not targeted for elimination due to an explicit ‘anti-multicultural’ intent, but rather that the people who would benefit the most from them aren’t as big a part of the Republican coalition anymore, and especially are on the other side of the Trump electoral coalition.

    Namely, the people that would benefit the most are big city metro college educated high earners (or on the verge of becoming so in a decade) – they’ve gone from being the most reliable Republicans to a key swing voter to somewhat less reliable Democrats. But especially they didn’t vote for Trump.

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  9. I agree with some of the other commenters here. While the tax bill may very well have some anti-multicultural effect, I doubt that’s the major intent.

    Paul Ryan is basically an Objectivist — remember how he made all his staff read Atlas Shrugged? — and I doubt he really gives much of a crap either way on the social issues. His working constituency is the top income crowd, who even if they adopt kids and send them to grad school, still stand to benefit enormously.

    My working principle to understanding policy proposals is to look at who gains rather than who gets hurt. In this case the Republicans desperately want to enact an enormous tax cut for corporations and the wealthiest among us. These cuts to deductions, credits, and spending are there simply to offset/mask the resulting increases in the deficit in a way that doesn’t harm their real constituency.

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  10. I generally agree with the commentariate. Ascribing malice to the eliminated deductions is a bridge too far. The GOP wants to give corporations and the wealthy a significant tax cut and have some minor vestigial sense of shame regarding deficits so they are trying to eliminate some deductions to make the deficit exploding from thermonuclear down to ‘merely’ atomic level.

    I’m very curious what the over under on this bill managing to pass is. I presume the house can whip it through but will Flake, Mccain, Collins et all vote it through the Senate?

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    • I’m pretty sure that this deduction slashing was generated in the following manner.

      Congressmen: “Okay, we’ve settled on the tax cuts and pretty much settled on the spending cuts. We’re X billion a year short of that 1.5 trillion number we must hit to pass this with 50 votes in the Senate. So let’s take out a big list of deductions and how much we’d save if we eliminate them and just go down the list. let’s just knock off anything to do with high tax blue states and college education. Those people don’t vote for us anyways. After we’ve done that, we’ll see how short we are.”

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        • I’m surprised they backed off on the 401k thing, although I pretty much expect them to desperately try to hit that well again.

          It came up, briefly, at a games party last weekend. The very conservative engineer who mentioned it was incensed at the idea that they’d take away the 401k deduction. Furious at a level I’d never seen from him in 20 years.

          They dodged a real bullet there, although I am honestly still confused as to how they thought it’d fly at all.

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  11. Given that this country apparently has a surplus of Phds in most fields (witness the number of post docs and the small number of faculty openings) this might force academia to introduce a degree between the masters and the PHd for those who don’t desire to be a faculty member. (This is true even in STEM) Set it up so the intermediate degree takes about a year longer than the masters. Mit for example has engineers degrees in the engineering fields, perhaps for the science 1/2 a scientist degree, and in the humanities a humanist degree.

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