Last Thursday, Senate Republicans released their tax overhaul plan that they believe will create a simpler and fairer tax system. The proposed plan caused an unsettling amount of worry for some academic institutions because of a certain endowment tax included in the tax reform. This 1.4 percent tax on investment income will affect private universities and colleges with over 500 students and endowment assets of over $100,000 per student. It will not include public institutions. What has spurred such a radical position on private institutions is the stereotype that these universities are “ivory towers” of tax havens. Unfortunately, this label may hold some truth, and a deeper analysis of the behaviors of well-endowed universities is necessary.
Continue reading “The Limited Value of Taxing University Endowments”