Some colleges have billion-dollar endowments — and now the GOP wants to tax them for it

Business Insider ^ | 11-3-2017 | Abby Jackson

[Anti-Bubba182]

House GOP leaders released sweeping tax legislation on Thursday.

Colleges and universities will pay a 1.4% excise tax on their endowment investment income if the "Tax Cuts and Jobs Act" is passed.

It's a big change from the current system, where college endowments are not taxed.........

[AZLiberty]

Although the amount is trivial it is symbolic and the Universities are sure to scream.

By that measure, the original income tax was "symbolic" and look where that got us. Perhaps it will get Harvard there, too.

[georgiarat]

True that.

[Anti-Bubba182]

Amen!

[SauronOfMordor]

The “Ivies” have an agreement among themselves to not award scholarships based on merit, only “financial need” ( and diversity). In a sane world, this would be prosecuted as illegal price fixing. Remove this, and the schools would have to compete on price to attract the best students.

[Lou L]

I hold no envy of, or any dislike of endowments in general, unless they're being used as a money-laundering vehicle, or some kind of political quid pro quo scheme.

I hate to see the tax code used as punishment for any earned money as well, but I'd hate to see otherwise-deserving students being unable to afford college because the endowment is run too tightly. Still, it's their money...

[OldMissileer]

I know many students can’t get government money if the family has too much income or assets; does it bother you that these schools get taxpayer money while sitting on these piles of money?

I spent six years Active Duty as an enlisted troop when I joined the Active Reserves so I could finish college.

I was on my own with parents retired and had nothing but my old GI Bill and a low-paying job. My university made me apply for Pell Grants and the admissions office told me I had to include my parents income. I told the ignorant young woman I was not only an adult on my own but had six years of military under my belt in a duty that had me do more for my Country than she would ever do in her lifetime.

She got really ticked off and took my submission but I was turned down because I had a "scholarship" from the Government in the form of my $410 per month GI Bill.

[Chode]

i'd settle for ZERO govt $$$ going to them for any reason, prolly make out better in the long run

[Harmless Teddy Bear]

I would like to think they are used to make tuition cheaper for their students.

I would like to think there is a calorie free candy that tastes good and has no side effects.

However, back on planet reality....

[Oatka]

Although the amount is trivial it is symbolic and the Universities are sure to scream.

In this case, hopefully there will be "incremental increases" in the coming years, as there is with most taxes.

[kearnyirish2]

That is ridiculous (to include your parents’ income when you’ve been on your own), but at least it was for a grant rather than a loan (even though you didn’t get it).

Young people today are very wary of college, and I don’t blame them; if you could earn enough to repay the loans or recapture your investment, your potential employer would be bringing foreigners in to take the job for less anyway...