B-School Bulletin: MBAs Protest Tax Bill

How Ending Tax-free Tuition Waivers Could Impact U.S. Higher Ed

News from The Wharton School at the University of Pennsylvania

“Graduate students across the country are staging walkouts and otherwise speaking out in protest of a provision in the tax reform legislation passed by the U.S. House of Representatives that could potentially add thousands of dollars to their tax bills.

“Currently, the tuition waivers that graduate students receive for acting as teaching assistants or research assistants are tax-free. The version of the tax overhaul passed by the House would treat those waivers as income, meaning they could be taxed. The Senate version of the legislation leaves the exemption in place, meaning the provision is one that would have to be negotiated by Congress before it can send the bill to President Trump to sign into law.

“’The tuition benefit is a really important component of enabling the best and the brightest to take the time that is needed for graduate education,’ said Laura Perna, chair of the higher education division of the Graduate School of Higher Education at the University of Pennsylvania. Perna and Patrick Thomas, founding director of the tax clinic at the University of Notre Dame Law School, recently appeared on Knowledge@Wharton’s SiriusXM show to discuss the impact such a change to the tax code could have on students, individual colleges and the country’s higher education system as a whole.”

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Noncompete Agreements Reduce Worker Pay — And Overall Economic Activity

News from UCLA Anderson School of Management

“In the heady days after one accepts a new job, a noncompete agreement may seem an innocuous bit of paperwork. These contracts, in which employers bar employees from working in competition after leaving the company, are routinely demanded of nearly one in five jobs in the U.S., according to a report published by the U.S. Treasury in 2016. Less than 10% of new hires try to negotiate their terms, according to the report.

“But workers who sign enforceable noncompetes pay dearly for their deference, according to preliminary results from new research. Employees bound by strong agreements get lower starting pay than their less restrained peers, and their earnings remain lower throughout their careers, according to a working paper by a team of academic researchers.”

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Kelly Goldsmith

Consumers On A Quest For ‘The Best’ Are More Likely To Behave Immorally

News from Vanderbilt University Owen Graduate School of Management 

“Consumers looking for the ‘best’ — in terms of value, quality, fit, or any other measure — are more likely to engage in immoral behavior, according to new research by Kelly Goldsmith, associate professor of marketing at Vanderbilt’s Owen Graduate School of Management.

“The search for an optimal product or service creates a ‘maximizing mindset,’ and while prior research has found a variety of personal implications (positive and negative), this is the first study to identify how the strategy may affect the way people treat others.”

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Integrity Should Come First

From Stanford Graduate School of Business

“Stanford made headlines this past week, gaining notoriety for careless data management and misrepresenting its financial aid program.

“The data security issue features prominently in the University’s official response. But the greater failure is one of integrity. The leadership at Stanford Graduate School of Business was caught lying about its commitment to ‘need-based’ financial aid, which it has been doing for more than a decade. Yet this is only mentioned in paragraphs 12 and 14.

“Integrity should feature more prominently in Stanford’s official response, as it should in campus discussion more broadly, especially at the business school.”

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Biases Influence Holiday Giving

News from Carnegie Mellon University

“One of the things that makes holidays simultaneously fun and stressful is gift-giving. Behavioral economists in Carnegie Mellon’s Dietrich College of Humanities and Social Sciences have been studying the art of good gift selection and the disconnects that arise between the person choosing the gift and the person receiving the gift.

“Behavioral economics is the interdisciplinary field of economics and psychology that aims to understand how people can be ‘predictably irrational’ and factor human emotion and behavior in understanding how economic systems work. At Carnegie Mellon University, behavioral economists are looking to answer some very complex and important questions. They are studying the reasons behind our consumption of unhealthy food, better ways of non-abstinence based sex education, and gender discrimination in the workplace.”

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