Stanford Faces $43 Million Tab in Trump Endowment Tax. About 30 wealthy colleges will be affected by the 1.4% levy. Provision was passed as part of the Republican tax bill in ‘17.

Bloomberg | February 11, 2020 | Janet Lorin

[karpov]

No excerpt allowed from Bloomberg, store here.

[karpov]

The Republican tax bill imposed a 1.4% tax on college endowments above $500K per student. "Elite" universities talk so much about "inequality". Despite the huge tax breaks they get under nonprofit status, they have been raising their prices faster than inflation for decades. I think they should pay the same taxes on interest, dividends, and capital gains as other Americans. It would be fair and it would make them less likely to advocate for higher taxes if they were subject to them.

[Buckeye McFrog]

I am sure they’ve all employed skilled accountants who can bring that number in at $499,998.00 per student.

[karpov]

If they had done so they wouldn’t be paying the tax.

[A_Former_Democrat]

Accountants aren’t that smart.

[headstamp 2]

Good, now cut federal money.

[spudville]

They must be ecstatic! Higher taxes! They love that right?

[jazminerose]

These unis are sitting on *billions* in endowment funds. Much of it from the Saudis and other groups who hate us to set up Death to the Great Satan Departments.

Tax exempt.

[gubamyster]

Good, now cut federal money.

I agree. I think Universities should be required to issue student loans. That way they have a vested interest in actually teaching their students relevant skills that will ensure they get wage paying jobs so they can pay back the loans. The universities would be on the hook, not the American taxpayers.

[irishjuggler]

Yeah, seriously. I don’t know the definition of “student” relevant section of the tax code, but watch for these schools to suddenly enroll a bunch of new students in order to get their endowment-to-student ratio under the line.

In any case, though, I freakin’ love this tax. These left-wing indoctrination factories are filled with professors who never met a tax they didn’t love... so it’s fun to see them hit.

[headstamp 2]

[[[I think Universities should be required to issue student loans.]]]

Excellent idea. Let them have some skin in the game.

[magooey]

The Republican tax bill imposed a 1.4% tax on college endowments above $500K per student.

Is this annually? I hope it isn't the thin edge of the wedge of a wealth tax.

[rb22982]

I believe it is annually. Personally, I’d prefer a wealth tax over an income tax in general although I’ll oppose all wealth taxes since they will only be additive rather than replacing income taxes.

[Buckeye McFrog]

The variable is the number of students.
Just quickly accept another 10,000 or so for online classes.

[karpov]

My sentence was inaccurate. It is a 1.4% tax on the *income* from the endowment, so it is no more a wealth tax than taxes on interest, dividends, and capital gains.

[A_Former_Democrat]

The Stanfords won’t do that.

What, mix the proletariat in for a mere 43 million? that’s chump change for them Silicon Valley can easily make up the difference

[vikingd00d]

>>In any case, though, I freakin’ love this tax. These left-wing indoctrination factories are filled with professors who never met a tax they didn’t love... so it’s fun to see them hit.

I’d love it more if it were higher... :)

[LeonardFMason]

Are you sitting?

The top 108 private and public universities hold endowments of:

$475,813,000,000.00 - That is a half a TRILLION dollars!

At $500K per student that would mean if these universities combined were educating 951,626 students(8,811 students per school) they would have to pay this tax.

This tax would bring in over $66,000,000,000.00 dollars.

FINALLY! A tax I like!

[Ancesthntr]

“Good, now cut federal money.”

“I agree. I think Universities should be required to issue student loans. That way they have a vested interest in actually teaching their students relevant skills that will ensure they get wage paying jobs so they can pay back the loans. The universities would be on the hook, not the American taxpayers.”

---

I absolutely agree - the ONLY reason that tuition is so high is that the universities “cracked the code” in the early 1970s, and then colluded with each other to steal trillions of dollars from the American public and taxpayer in the nearly 50 years since. The “code” is that if tuition is too high, Congress will step in with grants, tax breaks and loan guarantees. The problem is when little Johnnie has a Sociology degree and can’t find work paying enough to live and also pay back the loan. Who pays for this? Well, Johnnie lives a crappie life (though he made his choices, so he should) and never (as of the new Bankruptcy Code of 2005) gets to discharge the debt; the bank does just fine - it’s loan and interest are guaranteed (well, they were, until the Feds took it over in/around 2009); and the Feds (which is to say, the taxpayer) get kicked in the nads by having to pay the loan and interest back. NO ONE has any accountability - not Johnnie, not the school, not the bank (before ‘09) and certainly not the Feds.

Change that system to subsidize the loan ONLY until 9 months after Johnnie graduates, and then the BANK (take the Feds out of the business) bears the risk. Change the Bankruptcy code to allow the debt to be wholly or partly relieved in Bankruptcy. Put at least 1/4 of the burden on the college or university. Now you have accountability - the bank won’t loan the money until/unless it is satisfied that Johnnie will be able to pay it back, and neither will the university. He’ll have to have a good prospect of graduating, and have a major that offers a high likelihood of paying a decent wage. His grades will be checked each semester by both the bank and the university, and if he goes below (for example) a 2.5 GPA, then he’s kicked out unless he can arrange his own financing from that point forward.

Where there is no accountability, abuses occur. The entire student loan/tuition fiasco is metaphysical proof of this.

[NobleFree]

That money will do less harm in the hands of the government than in the hands of any of America's 30 wealthiest universities.

[gubamyster]

I think the whole university system needs to be overhauled. I attended a large university in the ‘80’s. some classes were 200-500 students. We never asked questions during lectures, there were TA’s for that. Students were hired to take notes & sell them, if you missed something. Well, 40 years later, they are still teaching the same way.

I never could understand why these lectures now can’t be on a pod cast. That way no huge building would be necessary - the professor could give the lecture from his office or where ever. Students could playback parts they missed. They could also watch the podcast at night or a convenient time & allow them to work during the day. The professor would only need to record 1 podcast, rather than teach the same thing to 2 or 3 different classes. The class could still meet for test taking or as necessary a few times throughout the semester.

Not all classes could be handled like this, there would still need to be labs & TA sessions, buy it seems lo me like this would cut down on a lot of expense. It would also cut down on the number of people needing to live on campus as more would be able to commute.