I completely missed that Republicans introduced a bill to increase the endowment tax from 1.4% to 21%. If passed, Harvard would go from paying ~$35m to $525m/yr in federal taxes (that’s 8.2% of its current operating expenses)
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Interesting that this is aimed at only private schools. Couldn’t be because Greg Abbott reminded someone the UT and Texas A&M endowments combine for nearly $68 billion could it?
This excise tax was created in the 2017 tax bill. It will not surprise most people that almost all affected universities are in blue states. https://www.acenet.edu/Documents/En...
So, to bankrupt education begin with eating up their budgets with increased endowment taxes, but let’s reduce corporate taxes because. . .Just another way to destroy America.
I also thought surely they meant 2.1%… so looked around a little and found JD Vance introduced a bill in ‘23/24 for a 35% tax rate… so I’m guessing 21% is probably right. 🙄
(Next do megachurches) the higher ed model has been a rico problem for some time, and it needs to be converted to a more practical and affordable work study model
This will not get us there any more than cutting research overhead will. There is no “we’ll do this instead” involved. They need to pay for the tax cut and hate elite education (actually most) education. That’s it
Thanks, I believe we share the same opinion of the new administration, but “elite education” is a phrase that makes me feel curious. I wish education were more accessible. The astronomical rise of college costs mirrors the new wealth inequality, and I feel like a frog in slowly boiling water.
I don’t disagree with that at all and I should have put elite in quotes, as MAGA tends to focus on the most exclusive and famous (and liberal) while scarcely they’re only a tiny sliver. I don’t think they have any plans for anyone else
Agreed, I don’t know what the answer is because education and research are critical and we need to support our educators, scientists, and scholars. If you need some dark humor, “The Death of Stalin” is a scary but hilarious look at the aftermath of what we’re heading into
Except they're also not even pretending to pay for the tax cut. They want to increase the debt limit by 4 trillion dollars because they know damn well that none of their spending cuts are going to pay for the tax cut.
So. 53 billion. 10% return is 5 billion. And they are proposing taking 1 billion in tax instead of 50 million. You know what. I am not gonna lose my mind on this one. The endowment is still going to be worth 57 billion next year.
Their operating budgets are based on a certain revenue. It’s not about what the endowment is worth, it’s about how much income it generates to support the University.
That’s a lot of lay offs
I went back and looked. Harvard had a 6 billion budget last year. About 5 billion came from the endowment. Yale only used 2.3 from their endowment. Uncomfortable yes. Mass layoffs no. Also. What. Mass budget was 56 B. How is Harvard spending 6.
Not sure where you’re getting mass budget was 56B from? But link to costs are above.
If you think transitioning 1/6th of a budget away from operating expenses towards taxes won’t cause a lot of layoffs and budget cuts, then I have a bridge to sell you
The assault on higher education continues in ever more petty and destructive ways. As if universities have never contributed anything useful to our society. It’s grotesque.
Small liberal arts colleges do not accumulate endowments of $500k for every student. Thats an investment firm pretending to be a college for tax purposes. Destroy them.
Looks to be from the American Council on Education - American Council on Education https://www.acenet.eduPDF
Higher Education Institutions Subject to the Federal Endowment Tax
corporate tax is a tax on profits. they are proposing taxing income derived from the endowment. this will absolutely devastate every major university's ability to teach and do research
I had the same thought initially. However, after reflection, this is the corporatization of higher ed. By defunding Dept of Ed and charging the corp tax rate on private institutions, all education would be in the pay to play private sector. All a part of the transactional nature of narcissists.
These endowments allow for programs like at Brown that gives free tuition to any graduate from Providence public schools who get in.
This is what this bill will kill.
Exactly. There has been a big push in recent years to use endowment money to make it easier for poorer kids to attend. Raise the endowment tax by this much and those programs will evaporate, along with already high tuition increasing for everyone else.
since these institutions are engines of inequality, hedge funds running a nice tax shelter, the fix is a dollar to dollar transfer to state university system
Hm, yeah, back of the envelope math should include Brown ($670k / student). I think this list is from 2019 when the 1.4 tax was created. Brown was under the limit then :)
I don't see Hillsdale College on this list, but by my math it would qualify. Last time they wanted an exemption, I wonder how they'll justify it this time?
Yeah but a small relatively unknown college in Wisconsin can’t. The math just doesn’t math. Universities are going to fall. Not all of them, but any that are even slightly precarious.
How embarrassing for CMC not to make the list alongside Pomona, Harvey Mudd and Scripps. Or did they set the threshold specifically not to tax the Jaffa bros?
No one who is on Social Security, has Medicare or Medicaid asked for this. Republicans don't give a fuck about the old or poor. They would prefer they die so they can pocket their benefits. They are selfish, greedy bastards who are only interested in their billionaire buddies who can buy eletions.
Higher Ed must adapt and see this as a fight. The punch has already been thrown! ADAPT OR PERISH.👇
Universities are ran by people who succeeded by following rules & managing, not fighting or resisting. Universities have vast resources. Align & focus them!
Yes, the 🍊 promoted this policy in one of his Agenda47 videos. They will be "...taxing, fining, and suing excessively large private university endowments..." and then supposedly using those funds to create a free, online "American Academy". 😼😼😼😼
What do you think now if you voted for this felon and his minions? When are you going to wake we up to the fact that this felon trump does not care a damn about you.
There's a difference between mega churches & neighborhood churches where food pantries operate, space is donated to childrens' services, people know they can come for a $10 gas card to get to doctor appointments, AA meets, and other life stuff. I guess feeding people is now political?
You know, with its $53 BILLION endowment fund that it will never, ever drain -- not even if it gave a free education to every student who wanted one -- I feel pretty confident Harvard could afford to pay a tax rate that's roughly equivalent to mine
From fy2023-fy2024, Harvard's endowment rose by $2.5 billion. Investment return was ~10%. The GOP's motives are shitty and I trust them not at all, but the investment profits of all private foundations should be taxed more. Harvard can certainly afford it.
Looks like Trump's 2017 bill that taxed endowments only affected schools who had over $500k per student. Does this new bill change that?
Because if not, who cares?
Endowments play a vital role offering aid to lower income students. Why should only the wealthiest get to attend? BTW, public colleges in some states (looking at you PA) are not exactly a low cost option so by saying “eh, let them go to public schools” to save money is a vast oversimplification.
They have a 53 billion dollar endowment. They earn 2.5 billion dollars a year on just investment income. Taxes them at 20% of their investment income doesn't have to affect aid to lower income students.
Doesn’t have to and won’t are not the same thing. Again, what is the purpose of taxing a college/university at a higher rate exactly? The increase in revenue will be marginal.
100% this. Most of these privates have a fair amount of students on greatly reduced tuition costs. This is a good thing, not a bad one. I would imagine if their taxes are raised, some of that will disappear which would be a bad thing, not a good one.
For Harvard, anyway, a higher tax on endowment income wouldn't (or shouldn't) affect that. Their endowment is massively profitable. I favor education subsidies, but these are foundation subsidies, which I think should be reduced across the board, because they are radically undemocratic.
Yes, but... The Ivy-Plus schools are tremendous mobility engines for people from lower-income families who attend. The catch: very, very few get in. As much as I value top-notch education and research, these schools often function as engines of inequality. I mean, legacy admissions? C'mon.
I don't think that's true, but even if it were, then we should tax the elite institutions that have tens of billions in endowments and give the money to public schools.
They are taxed. Just at a low rate. I have no problem with that. I also think loans should be at a similar very low rate. Point being, education shouldn’t be a profit center- either for universities, the gov’t, or loan companies.
So, I just looked it up: The $2.5 billion year-over-year increase in the value of Harvard's endowment (including new gifts, but minus all disbursements from the fund) were more than 14 times the total ($175 million) spent on needs-based support for Harvard College undergrads.
And? I’m far less worried about an educational institution paying more taxes on gains from their investments and far more worried about Musk and Tesla paying their fair share.
Yeah, though I did see an article that said the chair of ways and means told the conference that they’re interested in increasing the endowment tax. Maybe not by this much?
Probably more than a few Rice University alums in Rep. Nehls' district (TX-22), and Rice is in the list (as is my alma mater, @macalestercollege.bsky.social).
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https://www.congress.gov/bill/118th-congress/senate-bill/3514
But it’s good?!
Ok then
Tax the churches
But. Do the same to the churches please
That’s a lot of lay offs
Not sure where you’re getting mass budget was 56B from? But link to costs are above.
If you think transitioning 1/6th of a budget away from operating expenses towards taxes won’t cause a lot of layoffs and budget cuts, then I have a bridge to sell you
It’s actually not too hard to understand at all if you’ve done budgets before.
I don’t think we apply a wealth tax on for profit corporations?
Damn what did they do with the endowment in the last decade plus because the impression I got was that they damn near went under in 2008.
https://www.acenet.eduPDF
Higher Education Institutions Subject to the Federal Endowment Tax
But I don't know why I would be mad about Harvard paying the same kinda taxes that other corporations 'pay'
and yes tax the churches too
Penny per share trading tax too
Tax the fuck out of them
https://www.investors.com/etfs-and-funds/sectors/sp-500-companies-paid-no-tax/
This is what this bill will kill.
Going to have to see some consolidation of the smaller funds to keep them viable
This is a straight-up wealth tax.
Drastically increase taxes on education.
Make America MORE stupid and give complete control to Oligarchs.
Outrageous.
#taxbillionaires and #AbolishBillionaires
#GOPBetrayedAmerica #GOPHypocrisy and #GOPLiesAboutEverything #TrumpCrimeFamilyForPrison
Universities are ran by people who succeeded by following rules & managing, not fighting or resisting. Universities have vast resources. Align & focus them!
Organize, RESIST, & reform. #NoRetreat
https://www.donaldjtrump.com/agenda47/agenda47-the-american-academy
Because if not, who cares?
https://www.congress.gov/bill/119th-congress/house-bill/446/text