College Endowment Tax Hike

[Anonymous]

Anonymous wrote:It looks like the tax for colleges with large endowments will be increased from 1.4% to 20%. While this may be a popular policy idea among the general public, I'm concerned that the actual outcome will be bad for college students that need financial aid. If Harvard is taxed at a rate of 20% of net investment income, they would owe around a billion dollars in endowment taxes each year (40k per student). The entire financial aid budget for Harvard is only around 800 million, so this tax would effectively eliminate Harvard's ability to offer financial assistance to low-income students.
https://www.politico.com/live-updates/2025/05/09/congress/republicans-eye-massive-expansion-of-college-endowment-tax-00339060

The problem isn’t really with any of the ideas for cutting costs or raising revenue.

Someone could make a reasonable argument for all of them.

The problem is that everything is being done in a sudden, random, cruel, vengeful way.

If Trump somehow does something good, he’ll poison that good idea. No one will believe that anything he adopts could be good. Once he’s out, everything he’s done will be reversed.

[Anonymous]

Makes no sense to pick on colleges and not other tax-exempt organizations.
Trump now also wants to go after people making more than $2.5 million. I am not one of them, but that seems unfair too.

[Anonymous]

Perhaps colleges should be given a choice. 20% tax on endowment income or 20% tuition reduction.

[Anonymous]

Anonymous wrote:Looks like they are just looking to make sure these wealthy institutions pay their fair share.

This is definitely an issue that progressives and conservatives agree on.

+1

[Anonymous]

Anonymous wrote:Makes no sense to pick on colleges and not other tax-exempt organizations.
Trump now also wants to go after people making more than $2.5 million. I am not one of them, but that seems unfair too.

I am good with additional taxes on those making over $2.5M and taxing the mega churches and other tax exempt organizations that are not doing their fair share to make a positive contribution to society.

[Anonymous]

Anonymous wrote:Makes no sense to pick on colleges and not other tax-exempt organizations.
Trump now also wants to go after people making more than $2.5 million. I am not one of them, but that seems unfair too.

OMG - seriously? “Unfair” ??!?

You are defending these fat-cat millionaires and billionaires??

[Anonymous]

Anonymous wrote:

Anonymous wrote:Looks like they are just looking to make sure these wealthy institutions pay their fair share.

This is definitely an issue that progressives and conservatives agree on.

Sure as long as they throw in mega churches, evangelicals, country clubs and other tax evaders .

and billionaires

[Anonymous]

Anonymous wrote:Do the evangelical churces too, then.

And liberals too !!!

[Anonymous]

Anonymous wrote:

Anonymous wrote:It looks like the tax for colleges with large endowments will be increased from 1.4% to 20%. While this may be a popular policy idea among the general public, I'm concerned that the actual outcome will be bad for college students that need financial aid. If Harvard is taxed at a rate of 20% of net investment income, they would owe around a billion dollars in endowment taxes each year (40k per student). The entire financial aid budget for Harvard is only around 800 million, so this tax would effectively eliminate Harvard's ability to offer financial assistance to low-income students.
https://www.politico.com/live-updates/2025/05/09/congress/republicans-eye-massive-expansion-of-college-endowment-tax-00339060

The problem isn’t really with any of the ideas for cutting costs or raising revenue.

Someone could make a reasonable argument for all of them.

The problem is that everything is being done in a sudden, random, cruel, vengeful way.

If Trump somehow does something good, he’ll poison that good idea. No one will believe that anything he adopts could be good. Once he’s out, everything he’s done will be reversed.

Which is why he, or his protege, won't be leaving.

[Anonymous]

Anonymous wrote:It looks like the tax for colleges with large endowments will be increased from 1.4% to 20%. While this may be a popular policy idea among the general public, I'm concerned that the actual outcome will be bad for college students that need financial aid. If Harvard is taxed at a rate of 20% of net investment income, they would owe around a billion dollars in endowment taxes each year (40k per student). The entire financial aid budget for Harvard is only around 800 million, so this tax would effectively eliminate Harvard's ability to offer financial assistance to low-income students.
https://www.politico.com/live-updates/2025/05/09/congress/republicans-eye-massive-expansion-of-college-endowment-tax-00339060

It would be better to reexamine the entire tax-exempt sector. Start with churches. And political action committees.

[Anonymous]

Anonymous wrote:Perhaps colleges should be given a choice. 20% tax on endowment income or 20% tuition reduction.

Trump and Co. want to make it harder to go to college, not easier.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Do the evangelical churces too, then.

And liberals too !!!

What does this even mean.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It looks like the tax for colleges with large endowments will be increased from 1.4% to 20%. While this may be a popular policy idea among the general public, I'm concerned that the actual outcome will be bad for college students that need financial aid. If Harvard is taxed at a rate of 20% of net investment income, they would owe around a billion dollars in endowment taxes each year (40k per student). The entire financial aid budget for Harvard is only around 800 million, so this tax would effectively eliminate Harvard's ability to offer financial assistance to low-income students.
https://www.politico.com/live-updates/2025/05/09/congress/republicans-eye-massive-expansion-of-college-endowment-tax-00339060

This part is not quite accurate. Undergraduates receive about $260 million of this, but almost all of it is absorbed through lower operating revenues (it is “net student income”) rather than through a specific distribution from the endowment.

A higher tax would reduce the endowment’s distribution to the operating budget, but that could be absorbed through multiple channels. Given the earmarking of much of the endowment, those specific areas would have to absorb much of the hit (professorships, certain proframs, research, and, yes, some scholarships but more of the “named” variety than financial aid). And the freely usable part would probably hit staff as pay and benefits are half of the operating budget.

This is an area that deserves scrutiny. Administrative costs are out of control at most elite institutions. Too many administrators earning unreasonably high salaries.

[Anonymous]

Anonymous wrote:If only this administration acted as much about making sure millionaires and billionaires paid their fair share.

Agree that a progressive tax rate system with no loopholes would be the best answer.

[Anonymous]

Anonymous wrote:Looks like they are just looking to make sure these wealthy institutions pay their fair share.

This is definitely an issue that progressives and conservatives agree on.

DP. Nice try to make this sound reasonable when it isn't. Trump wants to tax the endowments of higher ed more while giving breaks to the richest Americans and for-profit corporations. The "wealth" of the institutions goes to supporting students. The wealth of the individuals and corporations just makes rich people richer.