President Donald Trump announced a new tax plan on Sept. 27 that could affect the allocation of funds at UCF.
The Tax Cuts and Jobs Act (H.R. 1) will decrease funding to facilities such as public schools and colleges as the government will be taking less money from the wealthy, according to the 2018 White House budget.
The U.S. House of Representatives took action to pass the tax plan on Thursday, which overhauled the tax code for the first time in 31 years, according to an official press release.
In 1986, former president Ronald Reagan was the last to present such an extensive reform, according to the White House archives.
UCF student Alexander Zimmerman stands on the side of change, he said.
Zimmerman said he’s “waited patiently for tax reform” and looks forward to seeing it become active.
The plan will allow those considered middle class to save more money, but schools that rely on funding from taxes will take a blow, according to the section-by-section summary of the tax plan.
Though UCF may be directly affected by these changes, it’s too soon to know for sure, UCF Assistant Vice President of News and Information Chad Binette said.
Rachel Reichard, a UCF freshman art history major, said she opposes the plan.
Section 1204 of the tax reform would repeal the current Student Loan Interest Deduction (SLID), which benefited 12 million taxpayers in 2014, according to a letter by the American Council on Education.
The SLID allows any person with an income greater than $80,000 to deduct up to $2,500 in student loan paid interest, and by ridding this deduction, the national cost of student loans could increase by about $24 billion dollars during the next decade, according to the same source.
“I think funding for schools is definitely important because if they cut financial aid, less people may be able to go to school and in the long run, it could be an issue for the economy,” Reichard said. “I think education should be our No. 1 priority as a country.”
Additionally, the plan could repeal provisions that exclude tuition waivers and tuition exemptions from the income of campus employees and graduate students, resulting in a “major tax increase,” according to the American Council on Education’s letter.
If passed, the new tax reform will save the upper and middle class money through tax cuts from modified tax brackets, which are collections of income groups in close ranges taxed at selected rates. The tax brackets will be cut from seven brackets to four brackets and be simplified to rates of 12 percent, 25 percent, 35 percent and 39.6 percent, according to an official press release.
With fewer tax brackets, citizens will benefit from a greater tax relief and will be saving more money overall, according to an explanation released by Gary Cohn, the chief economic adviser to Trump.
Zimmerman said it’s fair for taxes on food and groceries to vary throughout the country, but it is unfair to continue making people pay more based on their tax bracket.
There is also a zero percent tax for low-income families and a “typical middle-income family will receive a $1,182 tax cut,” according to a press release by the Committee on Ways and Means, the main tax-writing committee of the U.S. House of Representatives.
Although it is a large change, money will still be saved as each group’s overall individual tax is cut, according to a summary of the tax plan.
It is also meant to lower business taxes to promote job creation and higher wages and eradicate wrongful loopholes and costly deductions, according to a Sept. 27 White House press release. On Nov. 2, Trump announced the new plan will cause the rates of corporate and individual taxes to drop drastically.
Although Zimmerman said he’s in favor of reform, he’s not completely behind the new plan.
“I’m supportive of this tax plan [but] it’s not as far as I would like to see it go,” Zimmerman, a junior history major at UCF, said. “I would look to see a flat tax of like, whatever percentage, maybe 15 or 20 percent, but everyone pays the same amount, the same percentage.”
While the plan isn’t exactly as Zimmerman would like, he said it’s “a step in the right direction.”
Conversely, Reichard said she’s fearful of what the new tax plan can cause, even if it happens inadvertently.
If the school is receiving less money from one place, it might take from another, causing bigger issues for students who are already struggling financially, she said.
“I do think it is too soon to tell,” Reichard said. “I hope for the best but at this point, no one can really know what will happen.”
UCF student Brent Wiggins, a senior English literature major, said he “associates himself with moderate beliefs” and doesn’t take drastic sides.
“I just hope that the money from taxes will still go to places that will benefit from it, that drastically need it,” Wiggins said. “If the money can still go to minority groups or struggling communities, I believe there can be a positive to the tax changes.”
He said he would like to believe the tax plan would not cause UCF students any grief but can imagine that some people will be impacted negatively.
“Right now, I don’t think it will affect students as much, maybe after graduation it could, but it depends on individual circumstances: tuition, loans, stuff like that,” Wiggins said. “It’s to be expected that this change would happen … but [don’t] think too much of it yet until it is finalized.”
Although revisions are still being made, Trump’s goal is to have the tax reform take effect starting Jan. 1, 2018.