by Adam Pack
Private universities with enormous donations are worried about the recipe in a “large, beautiful” account, which would significantly escalate the tax rate on annual investment income.
A proposal of the Republicans of the Chamber erect The tax rate on the profits of some universities from 1.4% to 21%, which can add hundreds of millions of dollars to an annual tax liability. Universities, whose huge equipment provides dollars for dollars at their disposal, warn that the lack of a stroke of the proposal of extensive tax and expenses of President Donald Trump would deal a “destructive” blow to their operational budgets.
“This is a destructive legislation for us”, Vice President of the Swarthmore College for Finance and Administration Robert Goldberg he said The Wall Street Journal. “It occupies something that is quite possible to master something that cannot be possible.”
GOP legislators defended the placement of university funds on their crosshairs, argument The fact that universities no longer fulfill their basic mission and instead act more like hedge funds than to prioritize student education. In addition, the Republicans of the Congress claim That many universities that would be subject to higher tax on their earnings allowed anti -Semitism to their campuses during Biden administration.
“For too long, universities have received favorable treatment from our Tax Code, at the same time disregarding the interests of taxpayers”, chairman of the House Committee Ways and Means Jason Smith wrote On X. “One, large, beautiful account increases university tax, subjecting the largest funds to the tax rate on the corporate tax.”
The offer of equipment tax is part of the Trump administration efforts Limit the alleged abuse of private universities that have become bastions of leftist ideology.
The escalate in tax on the equipment of the Act would exempt public and religious institutions and raise the tax rate at private universities, applying the record of equipment for studies.
Swarthmore College, Pennsylvania Liberal Arts College with equipment in the amount of $ 2.7 billion from June 2024, according to the Wall Street Journal, a 14% tax rate on the annual income from the investment generated by its equipment would be subject to a 14% tax rate. Universities with combustion worth from $ 1.25 million to $ 2 million per student would be taxed at this rate.
Private universities with funds from 750,000 to USD 1.25 million per student would be subject to 7% tax on annual investment income, while universities with equipment over USD 2 million per student would be subject to 21% tax – the same rate as corporations pay.
At least five institutions are expected – Harvard, Princeton, Stanford and Yale University and Massachusetts Institute of Technology (myth) – will be at the best 21% tax range.
President of the University of Yale Maurie Mcinnis called A tax proposal on the equipment “greater threat to Yale than any other bill in the latest memory” shortly after the groundbreaking provisions of the president of the chamber of the chamber early in the morning on Thursday morning. The university endowment was about $ 41 billion in a tax year 2024 and last year earned over $ 2 billion in annual income.
21% tax rate would force Yale to pay $ 690 million on annual income away, According to to the economist Wellesley College Phillip Levine. An additional tax liability is over half a billion dollars of growth compared to $ 46 million, which the school pays at the current rate of 1.4%.
Harvard University, with equipment of around $ 53 billion and equipment of almost $ 3 million owe An even higher amount of annual taxes on the profit of the dish as part of the proposal developed by the house. Trump administration moved To cut off all other federal funds to the University on Monday, the claim that Harvard did not repeat racial and anti -Semitism discrimination.
The spokesman for the universities of Yale and Harvard did not immediately answer at the request of the Daily Caller News Foundation for a comment.
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Adam Pack is a reporter at the Daily Caller News Foundation.
Photo “Yale University Campus” author University of Yale.
