Posted on 05/08/2008 4:08:03 PM PDT by John Jorsett
Massachusetts lawmakers desperate for additional revenue are eyeing the endowments of deep-pocketed private colleges to bolster the state's coffers by more than $1 billion a year, asserting that the schools' rising fortunes undercut their nonprofit status. more stories like this
Legislators have asked state finance officials to study a plan that would impose a 2.5 percent annual assessment on colleges with endowments over $1 billion, an amount now exceeded by nine Massachusetts institutions. The proposal, which higher education specialists believe is the first of its kind across the country, drew surprising support at a debate on the State House budget last week and is attracting attention in higher education circles nationally.
The idea has prompted a range of questions, including whether it is legal to infringe upon private colleges' tax-exempt status or single them out based on their wealth. It also faces significant opposition from the colleges and some skeptical lawmakers.
But proponents say the colleges' vast accumulations of wealth - Harvard University has the biggest endowment at $34 billion - and their often modest contributions to their host communities justify the assessment.
"When is a nonprofit not a nonprofit because of the wealth they are acquiring?" said Representative Paul Kujawski, a Democrat from Webster and chief backer of the legislation.
"It's mind boggling that one entity not paying taxes has $34 billion. How do you justify that?" said Kujawski, who serves on the influential House Ways and Means Committee. "When people can't afford to live. How do you justify not taxing them?"
(Excerpt) Read more at boston.com ...
Next story:
Harvard Trustees in Discussions with NH Officials
"When people can't afford to live. How do you justify not taxing them?"+Freep-mail me to get on or off my pro-life and Catholic List:
Please ping me to note-worthy Pro-Life or Catholic threads, or other threads of interest.
Only 2.5%? How about 33%?
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
When government wants money, even its allies aren’t safe.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
More Popcorn please......this should be VERY interesting.
They are aiming to tax the underlying asset value of the endowment, not the income earned on those assets.
The realist in me knows this is just a start and I, you, we will be the next target.
Jesse Jackson has already pushed the idea. You can take it to the bank, sooner rather than later liberals will attempt to impose such a tax on 401(k) and IRA accounts. There are TRILLIONS in such accounts and the liberals want access to them. Take it to the bank.
But isn't this year's income is bascially added to next year's asset base?
I’m in favor of seizing Harvard’s $34 billion and distributing it among FReepers..... we’d make better use of it. /s
Somebody (can't remember who) floated this idea during the Clinton administration. She wanted to impose a one-time fixed percentage assessment on every tax-free and tax-deferred retirement account. Thankfully it never went anywhere, but no Leftist bad idea dies forever.
I know that you are of two minds about this but people make donations to institutions that they believe in and whose mission they support. That those funds should even require laws to make them tax exempt to begin with flies in the face of small government believers. The solution to the state's financial problem is not to make government bigger and take away from charity given to worthy institutions. It is for government to live within its means.
I was simply noting that a tax on 2.5% of assets would equal a 33% tax on income for an endowment earning 7.5%.
You’re absolutely correct.
I’ve said for years there will be a “wealth” surtax on 401k withdrawals (which are already taxed at normal income rates) above some trivial yearly amount.
That’s how SS & Medicare get “healthy”.
As Ayn Rand wrote in 1972, when George McGovern was proposing a tax on wealth, “By What Right?”
What has Massachusetts done to justify appropriating money gifted to and being managed by a non-profit organization like Harvard? Before Freepers get encouraged about the liberal elites of Yale, Harvard and Princeton getting their just desserts, think about whose wealth they will be coming for next...
Every time someone starts arguing for more taxing authority, resort to the other Rand quote: check your premises. These loons are out to tax everything.
That is why you take the Traditional IRA tax deduction now, because you never know when the government will retroactively rescind the tax-free withdrawal status of Roth IRAs.
I’ve been googling high and low for the name of that Clintonoid who proposed that idea. I remember it well. It was around 1993, IIRC.
“Only 2.5%? How about 33%?”
LOL
TAX Harvard out of existance!
(They’ve been producing lib politicians doing that to us for 50 years.)
I don't see them coming at it quite that directly. What they'll do is "adjust" Sosha Security payments relative to to your IRA/401k withdrawals.
The ants once again will be paying for grasshopper maintenance.
Bump for later.
This is delicious: Liberals who vote for liberals are about to be robbed by liberals.
And exactly how much does the Federal Government hold in assets? What about the Governments of the States?
By the way, people can't afford to live because folks like Mr. Kujawski in the organized crime syndicate called the government are too busy taking it from them. What was that? "It's for the common good." "It's your civic duty!"
Many communities say colleges, which often own significant chunks of valuable land, rarely pay property taxes.
Perhaps, but they do spawn whole communities of support businesses. For example, the city of Charlottesville here in Virginia would be nought but a sleepy country town if not for the University of Virginia (a public University with a multi-billion-dollar endowment) and Monticello. And, in all honesty, the former is the larger economic driver.
And...believe me, all those support businesses do pay property taxes.
The plan has garnered support among those who believe many top-tier colleges are managed more like corporations than nonprofits...
Stupid journalists. There are three types of corporations: for-profits, non-profits, and governments. Colleges fall into the second category.
Lawmakers estimate that by assessing a fee for assets exceeding $1 billion, they would raise about $1.4 billion a year, a significant influx for a state budget of approximately $28.2 billion.
And the schools will simply pass on the added expense to their students (higher tuition, fees, and other costs) and to their employees (lower compensation, less hiring). And, all of this at a time when the liberals screwed up the student loan market with their borderline idiotic policies.
“”It’s mind boggling that one entity not paying taxes has $34 billion. How do you justify that?” said Kujawski, who serves on the influential House Ways and Means Committee. “When people can’t afford to live. How do you justify not taxing them?””
That statement, among all others, sums up the liberal mindset....the end justifies the means. If they can convince themselves, and the sheep they are elected by, that they are doing this for good...nothing will be safe.
I’m not too sure but I’d doubt that they Mass. Constitution gives the legislature power to transfer wealth. But then again neither does the US Constitution but that hasn’t stopped Congress from doing it for decades.
My vote? Massachusetts may try, but this goes nowhere!
Sorry, I don't see the sarcasm.
Coming soon to a 401k near you... ;)
Why not, that state is not known as Taxxachusetts for nothing!
“Somebody (can’t remember who) floated this idea during the Clinton administration. She wanted to impose a one-time fixed percentage assessment on every tax-free and tax-deferred retirement account. Thankfully it never went anywhere, but no Leftist bad idea dies forever.”
FOUND IT!! Alicia Munnell.
http://findarticles.com/p/articles/mi_m1282/is_n12_v46/ai_15544244
The tax-preferred status of life insurance and pension plans has helped make them the largest and fastest-growing form of household savings - which is what caught the eye of the tax-and-spend crowd. In 1992 the then Federal Reserve economist Alicia Munnell suggested levying a 15 per cent tax on employer contributions as well as on the annual earnings of pension plans, transferring $51 billion from pension recipients to the Federal Government.
That’s just the start. Miss Munnell, now assistant Treasury secretary for economic policy, worries that in the switch to her system, existing pension-fund assets might escape taxation entirely. Her solution? A one-time 15 per cent tax on all existing private pension-plan assets in the United States. At current levels, this would yield a whopping $720 billion.
So far these are only the personal views of Alicia Munnell. They are consistent with the class-warfare themes developed by the Clinton Administration, however. Pension coverage is concentrated among higher-income workers. In 1988, for example, 73 per cent of salaried workers earning over $50,000 were covered by a plan, compared to only 30 per cent of those earning less than $20,000. Pension income accounts for only 3 per cent of the retirement benefits of the poorest fifth of households, compared to 49 per cent for the wealthiest fifth.
Darn it, another reason to vote for McCain.
Excellent work finding that. All that money sitting there is just too inviting a target for this not to occur to somebody again.
h a r with a v
v a r with a d
harvard, harvard, whee!
This sounds eerily similar to the argument presented when the income tax was first proposed. Today, Social Security retirement incomes, princely sums, are being taxed.
If these animals get their nose under the tent, the fiction that "education is sacrosanct" goes out the window.
Now would be a good time to stomp (literally and unequivocally) Representative Paul Kujawski, and all other "supporters" of this idea so far into the ground, so that the idea will be forgotten for the next 8 generations...
Where do we send the contributions to the "Get rid of the parasites" fund?
Since as a conservative I certainly do not believe in using state power to seize the assets of others to further my own preferred worthy causes, I was mocking the kind of liberal legislator who thinks it is fine to start seizing endowment funds from universities for his preferred political purposes. Mockery and sarcasm are not necessarily the same, but when one states something that one does not believe as a way of illustrating what’s wrong with another’s position, that is a form of “reductio ad absurdum” if it is given in a logical form of argument but it can also be called sarcasm if it is offered without logical inferences spelled out, simply as a form of mockery:
“Sarcasm is stating the opposite of an intended meaning especially in order to sneeringly, slyly, jest or mock a person, situation or thing. It is strongly associated with irony, with some definitions classifying it as a type of verbal irony intended to insult or wound. Sarcasm can also be used in a humorous or jesting way depending on the intent of the person speaking.”
http://en.wikipedia.org/wiki/Sarcasm
never underestimate the ingenuity, hard work, and dedication of the looters in stealing the assets of others
It won’t be on withdrawls. It will be a % of the total asset value.
“When people can’t afford to live”
LOL, I think they meant to say can’t afford to live [IN MASSACHUSETTS]. If so, they should move somewhere they can afford.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.