President Trump in the Oval Office. February 13, 2025.
University endowments currently exist tax-free, but federal budget authors in Congress could change that. Stephen Moore explains in Newsmax, writing:
Republicans are searching for ways to “pay for” their tax cuts. Democrats want the rich to pay more tax. Here’s a solution that should make everyone happy.
House Ways and Means Committee Chairman Jason Smith is suggesting a tax on the $840 billion college endowments. These endowments will soon eclipse $1 trillion in size — more money than the entire GDP of many countries.
It’s high time that bloated and entitled universities pay their fair share for the government services they use.
Why not? Their professors forever lecture us about tax “fairness,” but the schools where they teach a few hours a week for their munificent salaries are the very embodiment of mostly white “privilege.” They are the richest institutions in the world that go untaxed.
The cost of this leakage to the tax base is going to grow exponentially as this generation of billionaires (Jeff Bezos, Bill Gates, Mark Zuckerberg and others) passes on trillions of dollars; much of it will enter into the vaults of the universities. These are capital gains that have never been taxed — and never will be.
Why is this a problem?
A good and just tax system has a broad base, so everyone pays — but a low rate so the tax system doesn’t discourage work, saving and investment. This means no loopholes and carveouts that allow the rich to keep their fortunes out of reach of the tax man.
What makes the college endowment scam even worse is that the preponderance of the dollars don’t go to small colleges or community colleges but rather to the Harvards, Yales, Stanfords and Princetons, which are already layered with gold and service the elite of society.
Read more here.
