Wednesday, December 29, 2010

What does a college have in common with tax law?

I was reading the Wall Street Journal and they reported that state universities are looking to charge the students that can afford to pay more a higher tuition so they can give more money to students that can not afford to pay the fees. Now you must ask yourself are these students that are paying more getting more, or just because their parents worked hard and became successful are they being punished. A student that has parents that did not succeed gets to go to school for less. Let me clarify that I am not talking about those students that qualify for scholarships where you succeed on your own merit this is just student they are paying to attend a state university.In the tax law we have two educational credits that parents can claim on their tax return to save a few dollars on their taxes. The hope credit can only be claimed if your AGI is 80,000 or less for a single person and 160,000 or less for joint filers. The lifetime credit is even less if are single your AGI must be 50,000 or less and joint filers 100,000 or less. So not only will the student that has parents that happen to succeed pay more to attend school but they will not qualify for any tax credits to help soften the burden. Is it just me or are we punishing or even encouraging people not to succeed because what we are saying is if you do you will pay higher taxes, lose out on tax credits and pay more for you child to attend a state university than another student with the same grade point average but just happens to come from a home that did not have successful parents. If you ask me we should charge based on grade point average not on success if you want to attend school then make the grade and earn your position in the school. Not only will that prepare you to fight for what you want but you will work really hard to keep it.