House Republicans Consider Expansion of Tax on University Endowments
“Trump has demanded that those schools eliminate diversity, equity and inclusion programs and accused the institutions of permitting harassment of Jewish students on their campuses.”
The left will light their hair on fire over this, but so what?
Politico reports:
Republicans eye major expansion of college endowment tax
House Republicans are considering a major expansion of taxes on college and university endowments, with some paying exponentially larger tax rates based on a sliding scale of wealth, according to four people granted anonymity to share details of the GOP’s tax package, which is being hammered out privately.
Endowments valued at $750,000 or less per student would be taxed at the current 1.4 percent rate on their investment income, according to two of those people. Endowments valued between $750,000 to $1million per student would be taxed at a 10 percent rate and those greater than $1 million per student would be taxed at a 20 percent rate.
The Ways and Means Committee’s tax bill is not yet finalized and details could still change, the people cautioned. The existence of a tiered proposal, but not the exact brackets, was first reported by Bloomberg.
The slew of endowment taxes comes as Republicans are struggling to find revenue to fund tax cuts and other elements of a megabill carrying President Donald Trump’s policy priorities.
It also dovetails with Trump’s effort to bend some of the nation’s largest and most prestigious universities to his will. Trump has demanded that those schools eliminate diversity, equity and inclusion programs and accused the institutions of permitting harassment of Jewish students on their campuses.
Ways and Means Chair Jason Smith (R-Mo.), has previously suggested that schools could lose their tax-exempt status for failing to “ensure a safe learning environment — including protecting Jewish students from harassment and violence.”
Under Trump’s 2017 tax bill, only universities with more than 500 students and endowment assets surpassing $500,000 per student face the current 1.4 percent tax. Ways and Means Republicans have considered both bumping up that tax rate significantly and applying it to a broader mix of U.S. colleges.
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Comments
Not a good idea because wealth can be a difficult thing to measure, and it can yo-yo around a lot. Much better is to tax the earnings from the wealth that can be measured.
Earnings yo-yo a lot more than wealth in percentage terms. Look at almost any function and its derivative, you’ll see the derivative is bumpier than the function itself.
So I think you’re just trying to make an excuse to protect university endowments. The idea though is to knock them down, toward no more than $1 million per student. This also encourages universities to admit more students, rather than enjoying advantages of exclusivity and making admission almost impossible for qualified students.
I am not making excuses to protect universities. I am all in favor of taking away their tax-exempt status if they fail to follow federal laws and regulations. What I think is dangerous is trying to value their wealth, and that’s because once we start down that path it will eventually lead to a wealth tax on us common folk. Yes, earnings can yo-yo; but they are tangible and can be valued. That is unlike wealth that is intangible and cannot be valued until sold.
When I saw the headline immediately thought 10%, but 20% is better. Also, levy property tax.
they’ll just pay for them with the taxpayers money
ANYYYY tax exempt status allows for this
again
should be no such thing as tax exempt status
Just remove their tax exempt status. They operate as businesses mostly anyways.
“taxes on college and university endowments, with some paying exponentially larger tax rates based on a sliding scale of wealth”
Because eat the rich, amirite?
It’s what Democrats have been telling us to do, so we’re listening!