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The United States government is considering abolishing tax incentives for international students who participate in the Optional Practical Preparation program. The author of the initiative is Senator Tom Cotton. His idea is aimed at equalizing the situation of foreign students and American workers - today foreign citizens receive more advantages than citizens. For example, international students are now exempt from paying Social Security and Medicare (FICA) taxes, despite the fact that they do not have access to appropriate social protection programs. According to Boston College professor Chris Glass, such a benefit gives a bonus to employers who choose foreign employees, since the cost of hiring is reduced by about 8%. However, critics point out that non-U.S. residents are effectively barred from using services that are funded by these payments, so the tax exemption has a good reason.
The new law assumes that the employer and the international student will share the total FICA tax rate of 15.3%, which will lead to a decrease in the employee's earnings and an increase in the boss's expenses. In general, the senator's proposal is being considered against the backdrop of growing attention to the OPT program itself, which some American politicians consider a source of competition for local residents.
Earlier, President Donald Trump promised to close this project, the position of the American leader was supported by Republican Chuck Grassley, who called on the US Department of Homeland Security to end its existence.
The complete abolition of benefits or serious restrictions on the program will jeopardize the position of approximately 240,000 international students, and will definitely negatively affect the attractiveness of American education for future generations. Therefore, the final decision of the authorities should take into account not only the immediate benefits, but also the long-term consequences for the American education system and the economy. To resolve the issue, the approval of both houses of Congress and the president is required, which complicates the process.
