If they make the income threshold low enough that graduate assistants would qualify, say $25k a year, then pretty much everyone is going to qualify.

How many graduate students (outside of a few par time programs) make more than $25k a year? It doesn't make sense to consider parents income since graduate students are generally considered independent (even if they are being financially supported by their parents).

How do you stop everyone from qualifying for tuition waiver? Even rich parents will just make sure their kids don't have any assets if they plan on going to grad school.

You can’t have your cake and eat it too. If you’re not giving out waivers to those with the need, then you’re actually treating the waiver as part of the compensation for being a graduate assistant, and it should be taxed.

You're arguing in circles. I know it's compensation, and I'm not the one who proposed we make it need based. I'm pointing out why your solution wouldn't work.

>it should be taxed

We tax what we want to tax, and we offer deductions to encourage behavior that we think is beneficial. Scholarship income used for tuition isn't taxed. We tax capital gains differently from ordinary income. We offer mortgage interest deductions.

Should is subjective. There is no inherent reason to tax tuition waivers the same as employment income, apart from that's the way the IRS does it now (absent this specific deduction).