The ‘Big Beautiful Bill’ Headed to the Senate Includes a Tax Increase on University Endowments

“[S]everal institutions with large endowments — Harvard, Yale, Stanford, and Princeton Universities and the Massachusetts Institute of Technology — would now face significantly larger tax bills”

Posted by Mike LaChance Tuesday, May 27, 2025 at 08:00am 1 Comment

If this goes through, people on the left are really going to lose their minds.

The College Fix reports:

Universities brace for endowment tax hike as GOP’s ‘big beautiful bill’ heads to Senate

Colleges and universities will likely face an increase in taxes on their endowments after Republicans’ “Big, Beautiful Bill” passed the House and is now headed to the Senate.

While some reports indicate administrators have hired lobbyists to try and water down the proposal, observers say some sort of tax hike is likely in the offing for these institutions.

Rather than a flat rate, House Republicans seek to increase taxes on private university endowments ranging from 1.4 percent to 21 percent, according to the legislation.

The law would hold “woke, elite universities that operate more like major corporations … accountable, ensuring they can no longer abuse generous benefits provided through the tax code,” states a report from Republicans on the House Ways and Means Committee.

The tax “would be tiered depending on the size of the school’s endowment and enrollment, with a top rate of 21 percent for those with endowments of at least $2 million per student,” the New York Times reported.

Endowments valued at $750,000 or less per student would be taxed at the current 1.4 percent rate, while endowments valued between $750,000 and $1.25 million per student would be taxed at a 7 percent rate, endowments between $1.25 million to $2 million would be taxed at 14 percent, and those about the $2 million threshold would be taxed at 21 percent.

“[S]everal institutions with large endowments — Harvard, Yale, Stanford, and Princeton Universities and the Massachusetts Institute of Technology — would now face significantly larger tax bills, ranging from $400 million to $850 million per year,” according to calculations published recently in the Chronicle of Higher Education.

House Ways and Means Committee Chairman Rep. Jason Smith, R-Mo., praised the plan on X: “For too long, universities have received beneficial treatment from our tax code while disregarding the interests of taxpayers.”