Posted on 03/11/2014 12:50:27 PM PDT by reaganaut1
House Republicans are plotting a $1.7 billion tax increase aimed at America’s most elite colleges and universities.
The tax increase is buried on page 879 of Rep. Dave Camp’s (R-Mich.) 979-page tax reform bill. The bill is considered unlikely to become law, but Camp is chairman of the powerful, tax-writing Ways and Means Committee, and his draft legislation is likely to provide a road map for tax reformers in years ahead.
The tax, as outlined in Section 5206 of the legislation, is called an “excise tax based on investment income of private colleges and universities.” It begins, “there is hereby imposed on each applicable institution for the taxable year an excise tax equal to 1 percent of the net investment income of such institution for the taxable year.”
The draft legislation goes on to make clear that the proposed new tax would apply only to private colleges and universities, not state colleges or universities. So Harvard’s $32 billion endowment would be fair game for the tax collector, but the University of Texas’s $20 billion endowment would remain tax exempt. The proposed tax would also only applies to the richest of the private colleges — those with endowments of at least $100,000 per full time student. That would exempt private colleges such as Georgetown or George Washington University, which are reportedly not as well endowed on a per student basis.
Even with those carve-outs, however, the tax adds up. The Joint Committee on Taxation estimates that the tax would raise $1.7 billion over the decade from 2014 to 2023. Harvard alone would pay roughly $30 million in tax for a single year in which a $30 billion endowment earned a ten percent return.
(Excerpt) Read more at reason.com ...
I don’t think the federal government could tax public (state) universities even if they want to.
Wow taking on “Big Education” a Democrat funding mechanism.
This has zero chance of making it thru the Senate.
I long for the when commie indoctrination centers such as Columbia, Cal-Berkeley, UT-Austin, UM-Ann Arbor, Harvard, Yale are taken over by Conservative Christian educational institutions such as Hillsdale College, Liberty University, Bob Jones University or, making it personal, Harding University.
Why should only 2 colleges be exempt?
I think you may have misread something... no colleges are specifically exempt, there’s an endowment-to-student ratio that applies across the board.
Those 2 are exempt from the 5% rule as far as I know
I suffered through college for a while, and had to pay for the privilege. Mostly with borrowed money, so years later as I have to continue to pay it back, I get forced to pay taxes on the money I earn to pay off the student loans.
Why shouldn’t endowments have to pay too?
Yeah, I'd love to tax the Ivy Leaguers who created this mess.
But this tax would also hit private colleges like Hillsdale who did not.
Yes, it could be improved with a per student exemption along the lines you suggest. But it ought to apply equally to public universities.
Wonder how it would affect the University of Pittsburgh? A university that is private but “state related” (whatever THAT means!) One rumored to have an endowment larger than many Ivy League schools.
Taxing schools is like taking corporations - they will simply pass the tax to their customers by raising tuition a bit more.
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