US Colleges Say Hiring US Students a Bad Deal 490
theodp writes "Many US colleges and universities have notices posted on their websites informing US companies that they're tax chumps if they hire students who are US citizens. 'In fact, a company may save money by hiring international students because the majority of them are exempt from Social Security (FICA) and Medicare tax requirements,' advises the taxpayer-supported University of Pittsburgh (pdf) as it makes the case against hiring its own US students. You'll find identical pitches made by the University of Delaware, the University of Cincinnati, Kansas State University, the University of Southern California, the University of Wisconsin, Iowa State University, and other public colleges and universities. The same message is also echoed by private schools, such as John Hopkins University, Brown University, Rollins College and Loyola University Chicago."
Tax Exempt? (Score:5, Informative)
the majority of them are exempt from Social Security
The last time I worked with people on an H1B visas, Social Security was paid.
Re:Tax Exempt? (Score:1, Informative)
Unless I'm mistaken, most international students have a J-1 visa, not an H1-B visa.
Misleading Title (Score:4, Informative)
If you look at these links these are list pertaining to why companies SHOULD hire international students not reasons as to why companies should avoid domestic students.
They are simply trying to "sell" certain types of students (international) to companies by stating the benefits of hiring those types of students, thereby catering to those student's interests.
Nothing to see here.
Re:Huh? (Score:5, Informative)
This is not possible (Score:3, Informative)
Re:Odd, to say the least. (Score:3, Informative)
The pdf comes from the office of international services. It lists the statement about hiring international students as being cheaper, only as an answer to "Isn't it more expensive to hire foreigners?"
Come to think of it, this is more like a specific part of the university trying to encourage companies to hire foreign students. Given that it is the office of international services that is doing so, I would think this is not surprising at all, maybe even expected. After all the whole point of such groups is to sell their foreign students. This is like each department pitching that they are the best.
The document is not saying that the companies should not be hiring americans, rather that if they are not hiring foreigners it should not be because it is more expensive to hire them; it is not.
Mountain out of a molehill if you ask me. Had I been an american, I would have ignored this story.
Re:Odd, to say the least. (Score:3, Informative)
IIRC the only reason they get "more" money from out of state students is because the state funding doesn't pickup part of the tab on them. Whether the money comes from the state or the student's pocket though makes no real difference.
Also, many private colleges were on that list, and virtually no private college charges different rates for in and out of state students.
Re:Solution? (Score:5, Informative)
Did nobody actually read the linked documents? All of them are promoting hiring students from the university. They simply list what laws apply when a busness hires international students. All of them exist to clear up misconceptions people might have about hiring foreign students, so that they are not unfairly ignored in the hiring process.
For example, one question is "Does the student need a work permit to be hired" and the answer is no. The student cannot get a work permit until they have a written job offer, so any employer waiting for proof of a work permit before giving an interview is asking for the impossible.
I think Cmdrtaco should read TFA.
Re:Tax Exempt? (Score:5, Informative)
If you are a foreign student and graduate from the US normally you start on your F-1 (practical training for one year) and then switch to an H1B. J-1 visas are mostly for people in universities since it's for visiting scholars.
Do not take things out of context! What the document says is companies might save some money if they hire foreigners on F-1 or J-1 visas. It is just so foreigners _who_study_in_the_United_States_ can find a job since employers seem to be under the impression that hiring a foreigner is a hassle. This would not apply to foreigners that get any other kind of visas. Also, the F-1 or J-1 visas do not last forever. Once you graduate you can extend it at most one year. Once you are on an H-1 visa you have to pay social security, medicare and everything everyone pays.
Still, to actually get the H-1 visa _is_ a hassle unless the employer is a university.
Re:Solution? (Score:3, Informative)
USC (Score:2, Informative)
BTW, USC is "one of the world's leading private research universities." It's not a public university like the others listed.
Re:Tax Exempt? (Score:1, Informative)
No. Most students have the F-1 visa. J-1 is for "visiting scholars".
university of california "southern" ??? (Score:3, Informative)
not sure that usc belongs in that first list ...
You'll find identical pitches made by the University of Delaware, the University of Cincinnati, Kansas State University, the University of Southern California, the University of Wisconsin, Iowa State University, and other public colleges and universities. The same messsage is also echoed by private schools ...
Troll Story (Score:5, Informative)
This story should be tagged as a troll story.
First, the documents to which the article links were not written with the intention of convincing U.S. employers to hire students who are non-residents of the United States in place of students who are citizens. Non-resident students are likely no different than any other student in college and need supplemental income to pay for their education. The documents purpose is to enlighten employers about the facts about hiring non-resident students who are in the country on a student visa. Perhaps the author would like to take it one step further and see if they can incite hatred in legal aliens who are here working under a green card as these pamphlets surely must be convincing U.S. employers to hire foreign students studying under a visa in place of legal immigrant workers. Or perhaps not.
Second, if the author bothered to read IRS Publication 519 [irs.gov], as the pamphlets suggest, they would have realized that any foreign student studying under a visa in the united states will fall under Social Security and FICA taxes if they are determined to have a substantial presence in the United States.
If a foreign student spends any more time in the U.S. than is necessary to attend school then it is likely they will fall under the substantial presence test and an employer will be required to pay Social Security and FICA taxes for the student they hired. A foreign student who is only available to work a fraction of each year is not a threat to the resident work force or the social services systems paid for by that work force.
As a member of the unemployed I understand the difficulties many people are going through but we can maintain a semblance of intelligence and become informed before making poorly researched rants.
Re:brain drain (Score:5, Informative)
Re:Tax Exempt? (Score:4, Informative)
No. Most international students have F-1 visas, not J-1. Most of exchange students are on J-1.
Re:Solution? Its not a sales tax. (Score:2, Informative)
Sales tax sucks because it slows down the velocity of money. You pay sales tax whenever the dollar circulates which could be many times in a year.
The income tax (while it has the really annoying forms and loss of privacy problems) is assessed on your net profit and once per year. Sales tax is on total sales revenue.
You could do a value added tax (VAT) which is not as bad as straight sales, but it still clobbers commerce and especially high volume business.
As far as fairness goes, the higher the income, the lower the percentage people pay in sales taxes. It's just empirically the way it works out (although there are solid reasons for it).
I hate the sales tax. It's my least favorite kind.
Re:Solution? (Score:3, Informative)
Re:Tax Exempt? (Score:1, Informative)
Well, I went through all these visas. ... Foreign student performing an internship. ... Foreign student studying in the US.
J-1
F1
As a Canadian myself, i the same amount of social security tax at work (TN Visa); however,
if I get laid off, I do not receive the same benefit as everybody else, who paid social security tax.
Re:brain drain (Score:5, Informative)
No the US needs to accept the fact that not everyone can be a scientist and engineer and start directing candidates to trade schools.
The word needs ditch diggers, the difference is America convinces the ditch diggers they need 4 years and a bachelors degree (And a ton of debt)
makes no difference for tax purposes (Score:5, Informative)
both F-1 and J-1 are exempt.
http://www.irs.gov/businesses/small/international/article/0,,id=131635,00.html [irs.gov]
F-visas, J-visas, M-visas, Q-visas. Nonresident alien students, scholars, professors, teachers, trainees, researchers, and other aliens temporarily present in the United States in F-1,J-1,M-1, or Q-1/Q-2 nonimmigrant status are exempt from Social Security / Medicare Taxes on wages paid to them for services performed within the United States as long as such services are allowed by the United States Citizenship and Immigration Services (USCIS) for these nonimmigrant statuses, and such services are performed to carry out the purposes for which they were admitted into the United States.
* Exempt Employment includes:
o On-campus student employment up to 20 hours a week (40 hrs during summer vacations)
o Off-campus student employment allowed by USCIS
o Practical Training student employment on or off campus
o On-campus employment as professor, teacher or researcher
* Limitations on exemption:
o The exemption does not apply to spouses and children in F-2, J-2, M-2, or Q-3 nonimmigrant status.
o The exemption does not apply to employment not allowed by USCIS or to employment not closely connected to the purpose for which they were admitted into the United States.
o The exemption does not apply to nonimmigrants in F-1,J-1,M-1,or Q-1/Q-2 status who change nonimmigrant status to a status which is not exempt or to a special protected status.
o The exemption does not apply to nonimmigrants in F-1,J-1,M-1, or Q-1/Q-2 status who become resident aliens for tax purposes.
Tax cuts are not a cure all (Score:5, Informative)
...drop FICA and Medicare taxes, seeing that College age students will never benefit from the programs because they will be long broke by the time the students reach retirement.
Nice sound bite but it is only true if the funding for those programs remains like it is today. I think the odds of that happening is a pretty good approximation of zero. Social Security and Medicare are the largest and most popular government programs out there. It is unlikely Congress will act quickly absent a fiscal emergency but sooner or later they'll have to address the funding of those programs.
Combined that with dropping the aggregate (State + Federal) Corporate tax rate to less than 10% and you will see Companies rushing into the US, bye bye 10% unemployment.
With the additional effect of causing millions of senior citizens who lose their primary income and health care. Which would have a devastating effect on their economic well being. There is no free lunch. Those programs serve a very real and very important purpose in spite of their problems.
We are already why to the right on the Laffer Curve and going further to the right is just going to push up unemployment more.
Sounds to me like you don't actually understand the Laffer Curve. The Laffer Curve hypotheses that there is an optimum tax rate - it might be necessary to raise OR cut taxes to reach that optimum. It does NOT tell you where you are on the Laffer curve, nor does it tell you what that optimum actually is. The Laffer curve does not prescribe or predict - it merely is a theory that an optimum exists. This makes it of limited value. The only way to find out for certain is to change the tax rate and see what happens but it is entirely possible we have a tax rate that is too low. That's the dirty little secret of those who constantly push for lowering taxes claiming that it will increase revenue based on the Laffer curve. You cannot possibly know where you are on that curve so you cannot use the Laffer curve as evidence that cutting taxes (or raising them) will be good policy.
Re:Tax Exempt? (Score:3, Informative)
As a Canadian myself, i the same amount of social security tax at work (TN Visa); however, if I get laid off, I do not receive the same benefit as everybody else, who paid social security tax.
That's because if an American gets laid off they don't receive social security as a "benefit", they receive unemployment compensation which is completely different.
Re:Can we mod this story off the main page? (Score:2, Informative)
Re:CUT Taxes don't increase them (Score:4, Informative)
We are already why to the right on the Laffer Curve [wikipedia.org] and going further to the right is just going to push up unemployment more.
No, we are not way over to the right on the Laffer curve - that belief is Laffable. The US had some of its highest marginal tax rates - up around 90% - between WWII and the Kennedy administration, to pay down the war debt. The economy grew, and the debt got paid down. We're currently nowhere near the level of debt-to-GDP ratio we faced at the end of the second world war, and have nowhere near the level of marginal tax rates we had then, so to put it bluntly the prognostications of economic doom and gloom from fine fellows such as yourself strike me as nothing but fear tactics.
Here's a fun exercise - go grab the numbers from your favorite legitimate source for debt, GDP, and which party had control of the white house, congress, and the senate. Put them all together in a spreadsheet or stats package. Generate the debt-to-GDP ratio, and plot that side by side with who was making the laws and policies. If you really want to do it right, you should lag the ratio by a year because the economy has some inertia, and it takes a little time for new policies to get a toehold. You'll probably be surprised at what you see.
Re:brain drain (Score:3, Informative)
Re:Tax Exempt? (Score:5, Informative)
"What the document says is companies might save some money if they hire foreigners on F-1 or J-1 visas. "
Actually the document I saw didn't even put it that way. It simply stated what was required for whom. There was no aspect of trying to use "savings" as a sales pitch.
University of Southern California is a.... (Score:2, Informative)
--
An armed society is a polite society. Manners are good when one may have to back up his acts with his life.
Robert A. Heinlein
Forgot about recent rule changes?? (Score:3, Informative)
The Bush's administration's recent Emergency rule change extended the post grad employment period [computerworld.com]for F-1 visa holders from 12 to 29 months.. This so called emergency rule change has been the subject of a lawsuit by US citizens who are the victims of wholesale discrimination. [computerworld.com]
This rule change potentially added another 400,000 workers to the US tech employment pool, which US citizens must compete against. Universities pointing out tax advantages of foreign grad hiring increases the suffering US citizens and GC holders must endure at the hands of the globalists.
Re:Tax Exempt? (Score:3, Informative)
just FYI - you seem to have some mistaken impressions of welfare
a) you think it's unlimited (it's not. lifetime maximum benefit period exists)
b) you think it pays well (it doesn't. below minimum wage appreciably)
c) you think it's rampantly abused (99.5% or more of people who are on it over a 10 year period are on it less than six months [median around 3] and never again in their life)
those who do manage to cheat the system and get more than they are supposed to get and/or manage to dodge lifetime limits are forced to pay back the government in most states when they're caught.
you also seem to ignore the fact that the government is the ONLY FUNCTION solution to some problems (not saying they're doing the best job of it right now).
PS: the biggest problem with the road system? SEMI TRUCKS, long-distance freight hauling should be on rail not road but we've been neglecting our rail system horrendously [which is why Amtrak can't make money] since the invention of the car
Re:University of Southern California is a.... (Score:1, Informative)
Yes. But that doesn't change the fact that it is a private university. The tuition of U.S. and California resident students is not subsidized, the way it would be at a public institution.