Its comically frustrating just how incompetent the current administration and the Republican Party seems to be. Bill Gates once said that US research universities are one of the best, and it would be very hard to fuck them up (I'm paraphrasing). This might just be one step in that direction.
As a former Graduate Student: you live very much close to poverty. The University provides a small stipend which covers essential expenses. Basically, you put up with the low wages because you love your research and are basically engaged in research all the time (i.e. you generally do not have a life). This tax hike will likely reduce that stipend and make life even more difficult.
I won't address whether there is a glut of graduate students; that is an interesting and separate issue. But the fact remains that US univ. have done a pretty great job of attracting the smartest people over the world to come here and engage in research.
Universities charge students large tuition fees and then pay the students very large salaries. After the tuition is subtract, the students make very little. All the tuition is tax free.
Universities can easy fix this by just charging the students a tiny tuition fee so that the students new tax burden is minuscule? The money paid to the graduate students could be the same (very little).
So what's the problem? Is it that Universities route money through the graduate student accounts to avoid paying taxes on it and now they are upset that their tax loophole might be closed?
What is to stop Universities from simply setting a super low tuition for funded PhD students to work around this?