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Comment by scarmig | Hacker News Reader

1) Why does the tax bill assume that treating waived tuition as income will raise revenue, then, if all universities will just switch to different accounting methods? Or is this one of the many parts of the tax bill that will actually increase the deficit but needs some kind of plausible cover until the buck can be passed?

2) "creative accounting" and "skim more money" are pretty ridiculous ways to describe how research grants work. It's a system like any other. Disrupting it for no particular reason is anything but conservative.

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As for 1), I don't think it's about raising revenue. Even if accounting methods didn't change, and grad students actually had to pay a few extra grands in taxes, this would be minuscule amounts of money in the grand scheme of things anyway. It's rather about making more money from the grants be spend on doing actual science. See e.g.: https://www.sciencemag.org/news/2017/03/trump-wants-2018-nih...

For 2), "creative accounting" is exactly what it is. Research grants are for research. The money can be spent on various things, which include salaries of researchers, the cost of lab equipment and supplies, and there's even a special category for "overhead", which is the money that goes straight to the mother institution to keep the lights on. The trick is to allocate $55k per grad student in the grant, and instantly take $20k from it to pay for the "tuition". In practice, the science labs, and the grad students are bringing income to the universities through the grants they get, and the universities additionally charge them for the privilege to do so.

Oh. The answer here is actually straightforward.

It's because the tax bill needed to pass through reconciliation (which has special rules related to the deficit). Generating artificial savings on paper allowed the GOP to increase the size of the tax cut on paper.

Because that’s how the game is played. When scoring the effect of a tax bill, you were not allowed to take into consideration changes in behavior

Didn't they get $500 billion worth of new revenue credit in the JCT score exactly by taking into account changes in behavior (aka dynamic scoring)?

This is completely wrong. The JCT takes into account dynamic effects when scoring all tax bills. I'm not sure why you would think this?

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