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Friday, November 6, 1998
Houston, Texas
Volume 64, Issue 54

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Student university workers get tax cut

By Ann Sutton
News Reporter 

The U.S. Congress, through the efforts of Texas Sen. Phil Gramm and Rep. Bill Archer, passed a bill in late October exempting student employees of Texas public universities from paying Social Security taxes.

Payroll tax exemptions have been in place for all states except Texas, Pennsylvania and New Jersey since a change in tax law in 1983. The bill, part of a federal budget omnibus, provides such legislation for three states.

The original law included an opportunity for states to be included in legislation 15 years ago, but Texas did not take advantage of it due to the fact that the state Legislature does not convene annually.

"The Texas legislation only meets occasionally, so (Texas) was unable to act during the window of opportunity that was available," said Larry Neal, Gramm's press secretary.

The new legislation will exempt student employees of public universities from paying the FICA tax, leaving students with more money.

"The students' paychecks will be larger because there will be no Social Security deduction," explained Monty Jones, director of news and public information at The University of Texas.

The new law, which will take effect in June 2000, will establish fair competition between state universities, possibly attracting students to Texas schools.

"(Prior to this legislation) there was a fair chance that students would go elsewhere," Neal said.

Texas has been able to re-introduce the tax exemption law for almost 15 years, but acted now on the encouragement of UT Chancellor William Cunningham, who bought the matter to Gramm's attention.

"The UT System sees this new provision of federal law as a clear benefit for student employees at Texas colleges and universities," Jones said.
 

Reach Sutton at
dcougar@mail.uh.edu.
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