Yes, there really is a tax break for upper-income graduate students and Congress won’t let it expire – AEI – American Enterprise Institute: Freedom, Opportunity, Enterprise

In an earlier Evidence Speaks post this year, Susan Dynarski and Judith Scott-Clayton summarized important research showing that federal tax benefits for college tuition have had no measurable impact on increasing college-going behavior.[1] Moreover, they note that the benefits are numerous, overlapping and complicated. Yet for all their flaws, these tax breaks enjoy such strong support from lawmakers that even the oddest one, which quietly expires each year, is always revived in a last-minute bill just in time for the tax filing season. The tuition and fees deduction (“the deduction”) was recently extended for a seventh time in an omnibus budget bill in February.[2] Out of all the tuition tax benefits the government offers, this one should be relatively easy to let go because of whom it unintentionally targets.

@brybree via Twenty20

Here is how the deduction works. Tax filers can deduct up to $4,000 of tuition and fees paid for higher education in the tax year. It is an “above-the-line” deduction, meaning filers can claim it without having to itemize deductions. As a deduction, filers earn a benefit equal to their marginal tax rate. The maximum benefit any filer could extract from the deduction is $880, the top marginal tax rate of those who are eligible (22 percent) times $4,000. There is no limit to the number of times a filer can claim the deduction, so long as he has incurred tuition expenses, and it does not matter what type of credential he pursues. There is, however, an income limit. Taxpayers with adjusted gross incomes above $80,000 ($160,000 for joint filers) cannot claim it.

There is nothing odd about those terms per se, but they interact with other tax benefits the government offers for tuition such that only upper-income graduate students benefit from the deduction. First, undergraduates, while eligible for the deduction, don’t claim it because a different tax credit only for undergraduates is more beneficial: the American Opportunity Tax Credit, which is worth up to $2,500 in tax relief for filers earning up to $90,000 ($180,000 for joint filers).[3] Tax filers can claim only one tuition tax benefit although they usually qualify for more than one. Second, graduate students with lower and middle incomes are also eligible for the deduction, but they can claim the $2,000 Lifetime Learning Credit, which almost always delivers a bigger tax break than the tuition and fees deduction.[4] But the Lifetime Learning credit has a lower income cut-off than the deduction. Those earning over $66,000 ($132,000 for joint filers) in 2017 cannot claim it.[5]

That’s how the deduction ends up targeting upper-income graduate students. While graduate students would always obtain a larger benefit from the Lifetime Learning Credit, they cannot claim it if they earn more than $66,000 ($132,000 for joint filers). They can, however, claim the deduction until their earnings exceed $80,000 ($160,000 for joint filers). Thus a narrow band of graduate students, those earning between the income limits for the two benefits, are the only students who would claim the deduction. At those levels, their incomes are higher than the incomes of about 80 percent of U.S. households.[6] Of course, tax filers can unintentionally claim a less generous benefit if they are eligible for more than one, such as an undergraduate claiming the deduction when she was eligible for the American Opportunity Tax Credit, which does happen.[7]

What the data say about eligible students

Using a representative sample of graduate students in 2011-12, Kim Dancy of New America and I estimated that just 8 percent of graduate students would benefit from the deduction. Meanwhile, 64 percent of graduate students would benefit most from the Lifetime Learning Credit. The rest of graduate students (28 percent) were ineligible for any tax benefit because they have no taxable income, their tuition was fully covered by grants and scholarships, or their earnings were too high.[8] The analysis assumes that tax filers claim the benefit that provides them with the largest tax reduction if they qualify for more than one. These numbers have likely shifted in recent years, with even fewer students benefiting from the deduction, because Congress has increased the earnings cap for the Lifetime Learning Credit to account for inflation but left the limits for the deduction unchanged.

We also estimated the average benefit graduate students would claim through the deduction for the 2011-12 academic year. At $621, it was smaller than the $859 average benefit that filers eligible for the Lifetime Learning Credit could claim.[9] Due to small sample sizes, however, we were unable to reliably assess important characteristics of filers eligible for the deduction, such as field of study.

The deduction didn’t start out as a graduate school tax break

As is often the case in public policy, lawmakers did not set out explicitly to provide a tax break to upper-income graduate students. In fact, graduate students were never the target group for the tuition tax breaks; undergraduates were always the focus. Although graduate students have been eligible for the tax benefits since their inception, changes to the policies over the years have left the deduction benefiting upper-income graduate students alone.

Prior to mid-1990s, the federal government did not offer widely-available tax breaks for college tuition. The idea first gained prominence when President Clinton proposed a $10,000 deduction for college tuition as part of his “Middle-Class Bill of Rights” reelection platform.[10] After critics noted that a deduction would provide more help to families in higher tax brackets, Clinton added a separate tax credit for the first two years of college to his proposal to provide more even benefits.[11] Congress adopted the president’s idea for the credit in 1997, naming it the Hope Tax Credit, but rejected the additional proposal for a $10,000 deduction. They instead replaced that proposal with a separate credit for “lifelong learning” (i.e., the Lifetime Learning Credit) that families could claim for education after the first two years of college, including graduate school.[12]

Thus, President Clinton’s original idea for a deduction and a credit was replaced with two credits, the Hope Tax Credit and the Lifetime Learning Tax Credit. In keeping with their original purpose to provide middle-class tax relief, Congress capped income eligibility for both benefits at $55,000 ($100,000 for joint filers) in 1997.[13]

With these two tax credits on the books, the idea of a deduction for tuition would be unnecessary and redundant, yet Congress later decided to add one anyway. Seemingly out of nowhere, lawmakers included a $4,000 deduction for tuition and fees in the Economic Growth and Tax Relief Reconciliation Act of 2001, the sweeping bill that included President Bush’s campaign proposal to cut marginal tax rates.[14]

The deduction differed from the two initial tax credits in a key way, which partially explains why lawmakers added it. Families earning up to $80,000 ($160,000 for joint filers) would be eligible as of 2004. That was significantly higher than the income cutoff for the Hope and Lifetime Learning Credits at the time and would therefore offer tax benefits to families with incomes arguably well above middle class. But why not just raise the income limits on the existing credits then? Because creating the new deduction was a way to restrict costs relative to expanding the existing Lifetime Learning Credit in terms of forgone revenue to the government. Recall that the value of the deduction is worth the amount deducted times the marginal tax rate, which at the time it was created would have been $1,120 at the most.[15] That is about half the maximum value of the Lifetime Learning credit.[16]

In other words, the deduction was a way to let upper-income families into the college tax benefit club on the cheap. It also ensured their benefits would be smaller than those of the middle-class families, who were eligible for the credits.

At the time it was created, the deduction was as much an undergraduate benefit as a graduate one. Upper-income families would claim it for tuition paid in pursuit of either degree. According to my analysis referenced earlier, about the same share of graduate students as undergraduates qualified for it prior to 2009.[17] But in 2009, Congress would make it pointless for almost any undergraduate to claim the deduction. That year, lawmakers replaced the Hope Credit with the American Opportunity Tax Credit, which provided larger benefits than the deduction with an income cutoff even higher than the deduction. With upper-income undergraduates now qualifying for American Opportunity Tax Credit, graduate students became the only group left who could benefit from the original tuition and fees deduction.


While Congress never decided to directly create a special tax break for upper-income graduate students alone, opting to extend the deduction year after year is effectively the same thing. The latest one-year extension, which made the deduction available for the 2017 tax year, cost the government over $200 million in forgone revenue.[18]

At a time when an undergraduate education feels financially out of reach for so many families, it’s fair to ask why Congress continues to spend these resources on students who have already earned an undergraduate degree. Moreover, these students earn a median household income of $102,000, according to my analysis.[19] There does not appear to be a good answer to that question other than inertia. Lawmakers have always extended the benefit so they continue to extend it. They may not realize, however, that it no longer benefits undergraduate students.

All of the tax benefits may be a policy failure for not increasing enrollment or being overly complex, but at least those for undergraduates put more money in the pockets of low- and middle-income families working toward their first degree. Today, the deduction does neither. It helps those who already have an undergraduate degree and earn high incomes to boot. While its cost in terms of forgone revenue are relatively modest, those resources would be better spent on aid that encourages students to enroll in and complete an undergraduate degree.


[1] Sue Dynarski and Judith Scott-Clayton, “The Tax Benefits for Education Don’t Increase Education,” Brookings Institution, April 2018,
[2] Bipartisan Budget Act of 2018, Public Law 115–123, § 40203 (2018).
[3] Internal Revenue Service, “Instructions for Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits) (2017),”
[4] There are some circumstances when the deduction might produce a larger benefit than the Lifetime Learning Credit if a filer paid tuition and fees below $4,000 and he is in the highest tax bracket of those eligible for the deduction. For example, a filer in the 22% tax bracket who deducts $3,000 in expenses receives a $660 tax reduction; under the Lifetime Learning credit his benefit would be $600.
[5] Ibid.
[6] Author’s calculation using the American Community Survey, 2016.
[7] Government Accountability Office, “Improved Tax Information Could Help Families Pay for College,” May 2012,
[8] Jason Delisle and Kim Dancy, “Graduate Students and Tuition Tax Benefits,” New America, December 2015, 6–7,
[9] Author’s calculation using the National Postsecondary Student Aid Study 2011–12. See also Jason Delisle and Kim Dancy, “Graduate Students and Tuition Tax Benefits,” New America, December 2015.
[10] William J. Clinton, “Address to the Nation on the Middle Class Bill of Rights,” December 15, 1997,
[11] Douglas Lederman, “The Politicking and Policy Making Behind a $40-Billion Windfall: How Clinton, Congress, and Colleges Battled to Shape Hope Scholarships,” Chronicle of Higher Education, November 28, 1997.
[12] Taxpayer Relief Act of 1997, Public Law 105–34 § 201 (1997).
[13] Taxpayer Relief Act of 1997, Public Law 105–34 § 101 (1997).
[14] Economic Growth and Tax Relief Reconciliation Act of 2001, Public Law 107–16 § 431 (2001).
[15] The top marginal tax rate for filers eligible for the deduction was 28 percent in the mid 2000s.
[16] See endnote 4. for an explanation of how sometimes when tuition and fees are below $4,000, tax filers can qualify for a larger tax reduction through the deduction than if the Lifetime Learning Credit.
[17] Jason Delisle and Kim Dancy, “A New Look at Tuition Tax Benefits,” New America, November 2015,; and Jason Delisle and Kim Dancy, “Graduate Students and Tuition Tax Benefits,” New America, December 2015, 6–7,
[18] Joint Committee on Taxation, “Federal Tax Provisions Expired in 2017” (JCX-5-18), March 9, 2018.
[19] Author’s calculation using the National Postsecondary Student Aid Study 2011–12. See also Jason Delisle and Kim Dancy, “Graduate Students and Tuition Tax Benefits,” New America, December 2015.

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NYT: Say, Iran may be building ICBMs after all

Surprise! The Iranians may have been cooking up long-range ballistic missiles all during the time that both Tehran and the Obama administration downplayed those possibilities. As far back as 2011 or earlier, Iran has operated a secret missile-development site near Shahrud, the New York Times reported. For those keeping score, that would be four years before the US agreed to a deal that did nothing to restrain such activities:

When an explosion nearly razed Iran’s long-range missile research facility in 2011 — and killed the military scientist who ran it — many Western intelligence analysts viewed it as devastating to Tehran’s technological ambitions.

Since then, there has been little indication of Iranian work on a missile that could reach significantly beyond the Middle East, and Iranian leaders have said they do not intend to build one.

That might explain why the Obama administration didn’t link missile development to the “bar” on Iran’s nuclear-weapons programs. That’s pretty weak sauce, though, considering how many test launches Iran made both before and after the JCPOA. They clearly were working toward some missile development, and they already had medium-range missile systems operational. Remember, Iranian leaders also insisted for two decades that they had no intention of building a nuclear weapon either, demonstrating the credibility of the regime when it comes to its stated military goals.

If that truly was the basis of ignoring missile development in the JCPOA, it’s not a very comforting thought. The truth behind the secret facility turned out to be fairly easy to uncover … once anyone put some effort into it:

So, this spring, when a team of California-based weapons researchers reviewed new Iranian state TV programs glorifying the military scientist, they expected a history lesson with, at most, new details on a long-dormant program.

Instead, they stumbled on a series of clues that led them to a startling conclusion: Shortly before his death, the scientist, Gen. Hassan Tehrani Moghaddam, oversaw the development of a secret, second facility in the remote Iranian desert that, they say, is operating to this day.

This raises serious questions, such as: Did the Obama administration know about this facility when it agreed to the JCPOA? If not, how did it get missed? Does this facility have other purposes, such as, oh … nuclear-weapons development? The outsiders who managed to connect dots to the Shahrud facility can’t answer all the questions from satellite photos alone:

It is possible that the facility is developing only medium-range missiles, which Iran already possesses, or perhaps an unusually sophisticated space program.

But an analysis of structures and ground markings at the facility strongly suggests, though does not prove, that it is developing the technology for long-range missiles, the researchers say.

For its part, Tehran refuses to discuss any kind of limitation on missile development — at least for now:

Defense Minister Amir Hatami said on Wednesday that Iran would never compromise on its missile power, reiterating Tehran’s long held position that Iran’s missile power is of defensive nature, Fars reported.

Responding to U.S. Secretary of State Mike Pompeo’s remarks on Iran’s missile power, Hatami said, “If the Islamic Republic wanted to pay attention to such delusional remarks over the past 40 years, it wouldn’t have gained such power, glory and dignity.”

ICBMs are not defensive weapons. They are by nature offensive weapons, used as a deterrent in some contexts, but the deterrent value lies in their offensive nature. They are designed to strike long distances away from borders and frontiers as a means of extending offensive capabilities. Paired with a nuclear-weapons program, they become an even greater offensive threat, one that would destabilize the entire region.

Defenders of the JCPOA will argue that the deal eliminated the threat of that pairing, but that’s nonsense. Even if Iran abided by the terms of the JCPOA, it would only have had to wait ten years to produce a nuclear weapon. Having an ICBM platform available for a nuclear warhead to fit it would fit perfectly into a strategy of dominating the region by nuclear blackmail, and would force others in the region to develop or acquire their own systems to counter it.

This is just another reminder that we cut a deal with a terrorist state that didn’t do anything to restrict its terrorist or its ability to develop platforms for later use against us. If anything, the JCPOA provided financial support for these efforts and others in the region, fueling conflict and pushing Iranian hegemony all the way to the Mediterranean, all without getting anything in return other than a piece of paper. We didn’t even get American detainees out of Iran. It’s a complete debacle, only becoming even more apparent with the passage of time.

The post NYT: Say, Iran may be building ICBMs after all appeared first on Hot Air.

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When it comes to God, minority Democrats have more in common with the GOP than with their own party

For years, the Republican Party has tried to convince minorities in the U.S. that when it comes to their faith, the GOP is a better fit for them than the Democratic Party.

Research repeatedly has shown that black and Hispanic voters, who skew Democratic in their politics, tend to be far more religious than their white Democratic counterparts. Yet they remain largely loyal to a party that repeatedly stands in opposition to their religious beliefs — a party that even went so far as to boo when its leadership attempted to insert a mention of God into the party platform at the 2012 Democratic National Convention.

Now, a recent report from the Pew Research Center has confirmed what the GOP has long claimed: Nonwhite Democrats have much more in common with Republicans than Democrats when it comes to the faith they hold so dear.

What did the study say?

As expected, white Democrats were significantly less likely than Republicans to believe in God. While 95 percent of GOPers said they believed in God or a spiritual force, just 78 percent of white Democrats said the same.

However, nonwhite Democrats were just as likely as Republicans to espouse a belief in the Almighty. In fact, nonwhite Democrats were slightly more likely than nonwhite Republicans to say they believed in God as described in the Bible.

And when it comes to denying the existence of God altogether, white Democrats are more than four times more likely than nonwhite Democrats to say they don’t believe in a higher power.

Also, minority Democrats are far more likely to align with the GOP when it comes to views on whether God is all-powerful, all-knowing, and all-loving.

In their beliefs about God, nonwhite Democrats more closely resemble Republicans than white Democrats

Commitment to faith

This data isn’t a huge surprise to poll takers, conservatives, or party leadership. And as Pew pointed out, it’s right in line with other research on the importance of religion and the political parties’ commitment to faith.

A 2014 Pew study found that nonwhite Democrats are about as likely as Republicans — and nearly twice as likely as white Democrats — to attend church at least once a week.

And while a hefty majority of nonwhite Democrats’ pray daily and say religion is very important in their lives — at a rate identical to Republicans — only a third of white Democrats consider religion to be important.

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German migration authorities have widened their probe into asylum application fraud and are now investigating 10 additional field offices on suspicion of granting refugees permissions to stay in the country without proper grounds.

On Friday, the German Federal Office for Migration and Asylum (BAMF) announced that it would review some 18,000 refugee cases in the city of Bremen going back as far as 2000, after the regional office discovered the approval of up to 2,000 asylum stays between 2013 and 2016, which did not match the government’s sanctuary criteria.

On Sunday, the scandal deepened with 10 more asylum decision offices added to the investigation list. BAMF announced that it will examine those branches where the average quotas of asylum applications accepted or rejected in comparison with other offices deviated by 10 percentage points or more, a spokeswoman for the Federal Ministry of the Interior said, following a request from the DPA news agency. A total of an additional 8,500 cases from 2017 would be reviewed, she added.

In addition, BAMF will review a complaint from a Rhineland-Palatinate Bingenan office employee, who on February 6 asked the Nuremberg headquarters to evaluate “divergent assessments of asylum procedure” at the office.

The new development follows a scandal in April, when it was revealed that a former BAMF official at the Bremen office was under investigation on suspicion of taking bribes from at least 1,200 asylum seekers between 2013 and 2016. Five other officials at the workplace are now also being probed for possibly taking part in the scheme. They include an interpreter and three lawyers. Amid the corruption scandal, the Supreme Audit Institution was tasked by Interior Minister Horst Seehofe on Thursday to probe the BAMF and the Interior Ministry.

In the meantime, BAMF denied claims that the government had been aware of the asylum fraud as early as February 2017. Suddeutsche Zeitung and the NDR reported on Sunday that, back then, authorities received emails asking the migration authorities to look at the Bremen branch, including a refugee lawyer who worked for the Lower Saxony office.

More than 1.6 million refugees, mostly from Africa and the Middle East, have arrived in Germany since 2014, due to the so-called ‘open door’ policy of Chancellor Angela Merkel. The influx of migrants has divided the country and significantly boosted support for the anti-migrant Alternative for Germany (AfD), which secured third place in September’s elections and entered parliament for the first time. The rise of the far-right in Germany came after a number of terrorist attacks involving refugees, as well as sexual harassment incidents across the country.

In October of last year, Merkel’s CDU and its Bavarian CSU sister party eventually agreed to cap Germany’s intake of asylum seekers at 200,000 a year. Over the next two years, Germany plans to spend €78 billion on migration-related issues, Der Spiegel magazine reported on Saturday, citing the Finance Ministry’s document.

The post German ‘Asylum Fraud’ Scandal Probe Widens to Include 10 More Migration Offices appeared first on American Renaissance.

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Why America needs a new approach to school desegregation



This article was originally published on The Conversation.

Despite all the time and effort invested desegregating the nation’s schools over the past half century, the reality is America’s schools are more segregated now than they were in 1968.

Keep that statistic in mind as the nation marks the 64th anniversary of Brown v. Board of Education – the 1954 Supreme Court decision that famously mandated the desegregation of U.S. public schools.

If the vision of educational fairness expressed in the Brown decision is to be achieved, the nation must deal with the underlying driver of racial segregation in schools: the inclination of white citizens to hoard educational resources.

I make these arguments as one who has studied school segregation up close for over a decade.

Racial segregation has proved resilient over the last half century. It circumvented court orders and reappeared in housing patterns shaped by school zoning policies. It adapted by moving down to the classroom level to take the form of tracking students into gifted and talented programs or Advanced Placement classes. It has become alloyed with economic segregation so that low-income students and students of color end up concentrated in the same schools. The consequences have been predictably dire for students relegated to these increasingly underfunded and racially isolated schools.

Why school segregation persists

The historical record shows that the desire for predominantly white educational spaces has undermined desegregation orders from 1954 to the present. For example, willfully resistant interpretations of the charge to desegregate “with all deliberate speed” in Brown v. Board delayed substantive action on school segregation for over a decade.

This resistance has only increased in sophistication and effectiveness over time. Carefully choreographed legal and political strategies slowed desegregation of schools. The 1992 Freeman v. Pitts Supreme Court decision made it easier to lift desegregation orders and opened the way for a national swing back toward racial segregation in schools.

This new segregation is not directly enforced by law, but indirectly through school zoning, housing patterns, and recently by neighborhood secessionist movements.

All of this permits affluent white families to continue to monopolize premium educational resources.

Charter schools have not been able to slow this resurgence of school segregation. Neither did the federal No Child Left Behind law. In fact, there are reasons to believe both have made segregation worse.

Corrosive effects of segregation

Students of color in racially isolated schools experience lower academic outcomes. Their dropout rates increase.

My own research has shown how school segregation communicates corrosive messages to students of color. My colleagues and I spent 10 years interviewing students in an Alabama school district that had its federal desegregation order lifted. These children watched as the district’s predominantly white leadership moved immediately to rezone and resegregate their schools.

Students assigned to the district’s underresourced all-black high school reported concluding that they were regarded as “bad kids,” “garbage people,” or “violent or something,” and therefore not worthy of investment.

Perhaps worse, the black students in the newly resegregated school read the harm being done to them as intentional and often saw no hope of redress. One student remarked: “I feel like this is an injustice, the way we were brought here to fail. And now it is becoming a reality. I think five or 10 years more down the line it’s going to be horrible. Seriously, it’s going to be horrible.”

Where schools have been desegregated, the negative academic effects are significantly reduced. Rucker Johnson, associate professor in the Goldman School of Public Policy at the University of California, Berkeley, has found that desegregation raises income levels and wealth accumulation across generations, and even improves health outcomes across students’ lifespans.

The psychological effects of desegregation, however, are more complicated. Desegregating schools provides more balanced access to resources, but puts students of color in schools staffed primarily by white educators who still often harbor implicitly and explicitly racist attitudes. Children of color pay a price for this.

For white students, school desegregation has no measurable negative effects on academic performance and graduation rates. Meanwhile, school desegregation provides many positive social effects for all students, including reduction of racial prejudice and generally becoming more comfortable around people of different backgrounds.

Possible remedies

So, what lessons have been learned from America’s failed efforts to desegregate its public schools?

The first is that the desire for racially segregated schooling evolves in response to efforts to promote racial equity in schools. This implies that lawmakers should not presume integration of schools will help communities “outgrow racism.” Desegregation orders, where needed, need to be permanent.

Second, geography has always been used as a proxy to preserve school segregation. Communities need housing policies that effectively inhibit the creation of racially and economically segregated neighborhoods.

Third, adequate and equitable funding is needed across school districts. There is nothing magically educational about sitting next to a white person in school. The primary problem is the way resources disproportionately follow white bodies.

Finally, the teaching profession must be fully diversified. Fifty-one percent of students entering public schools are persons of color, but more than 80 percent of teachers are white. Placing children of color in predominantly white schools and counting on color-blind professionalism to protect them is not an adequate plan. Research conducted by my colleagues and I reveals how this approach misunderstands the way racism operates and leaves children of color exposed to psychological and pedagogical harm.

America’s school systems need to recruit, support and retain teachers who identify with the experiences of the students they serve. Additionally, all teachers must be educated to recognize the constantly evolving forms of segregation in the nation’s school systems, to protect students from its worst effects and to join the struggle to build a better system.

Jerry Rosiek, Professor of Education Studies, University of Oregon

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