Posted on 10/07/2018 5:38:24 AM PDT by reaganaut1
Massachusetts is home to some of the best colleges and universities in the world—and some of the worst traffic jams.
A Democratic gubernatorial candidate is betting residents of the Bay State will be willing to tax the former to alleviate the latter.
Jay Gonzalez is building his long-shot campaign around a levy on the endowments of nine private schools that would create revenue to invest in public transportation and relieve Boston-area congestion, among other things. Boston drivers spend 14% of their time driving in congestion, the worst of any U.S. city, according to the INRIX, a transportation analytics company.
The 1.6% annual tax, which would be levied only on private, nonprofit schools with endowments that exceed $1 billion, would generate nearly $1 billion, including $563 million from Harvard University and $210 million from the Massachusetts Institute of Technology.
“I think it’s fair to ask the wealthiest among us—including major institutions that have accumulated enormous wealth in part thanks to their exemption from taxation—to contribute to our greater community,” Mr. Gonzalez said.
The idea has been kicking around Massachusetts progressive circles for at least a decade, but it has met resistance. Critics argue that taxing endowments would undermine the brainpower engine that gives Massachusetts a competitive advantage.
The state’s colleges employ more than 100,000 residents, spend more than $9 billion in salaries and personnel expenses and bring in $2.5 billion in research funding each year, according to Richard Doherty, president of the Association of Independent Colleges and Universities in Massachusetts, which opposes the tax.
“Taxing endowments is bad for students, bad for our economy and bad for Massachusetts,” Mr. Doherty said. “The Pandora’s box of endowment taxes was opened by the Congress in December.”
(Excerpt) Read more at wsj.com ...
Exactly. Why should incredibly wealthy institutions like Harvard and MIT be untaxed while the working people of Boston and Cambridge are taxed to the limit?
Lets see how progressive they are when it is THEIR money...my guess is not so much.
They are a business and should be taxed as such.
I have an issue with such endowments in that the universities are stingy in terms of actually using them to assist deserving and needy but very bright students. They sit on the money but they use very little of it to do anything worthwhile but they sure do like to keep their prices high!
We all know that there’s almost no possibility the proposed taxation would actually do anything about traffic congestion: it would just go to support more government employees’ getting in productive people’s way, or to payoffs to Democrat supporters. I think Harvard and other institutions with large endowments should affirmatively choose to invest in public transportation projects. Wouldn’t it be in their immediate interest to have Boston be a better place to commute?
Support for the proposed tax sounds like, “Just use the government’s monopoly on armed force to take money from those we don’t like,” which is pure leftism.
Let's see how long they can spew leftist propaganda without a subsidy for the taxpayer.
Actually, you’re kind of off on that. I believe that Harvard comps the tuition if the family makes $200,000 or less.
As I wrote, I don't support an arbitrary tax on big endowments. I do support taxing them at the same rates as individuals.
My thought. Why should they get tax breaks from the state? They obviously have a quota for MA public school students, and they don't usually choose the best ones.
In that case, the state should pass a law making all foundations taxable, rather than singling out specific ones. It could be done on the state level, although it would affect taxable status for the Feds.
... would NOT affect taxable status for the Feds.
What an utterly moronic idea. Once you start the precedent of taxing wealth you open the door to the looting of the life savings of every person in the country. You are apparently unaware of how the current income tax reached its current rapacious level. It started as a tax on the wealthy. Now it plunders the income of everyone else who is actually productive. Given the unlimited greed and lust of government bureaucrats for other peoples’ money it won’t take long before they lay claim to everything over a certain minimum amount. Only an idiot or a leftist (but I repeat myself) would espouse a wealth tax.
We already have taxes on interest, dividends, and capital gains. Why should multi-billion dollar endowments be exempt from those taxes? I don't think Harvard, MIT etc. are functioning as charities.
It’s the number one industry in Massachusetts. What else would they tax?
Agreed. It should apply to all endowments though, not just private non-profits as mentioned in the article.
The 1.6% annual tax, which would be levied only on private, nonprofit schools with endowments that exceed $1 billion, would generate nearly $1 billion, including $563 million from Harvard University and $210 million from the Massachusetts Institute of Technology.
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