Reply to How Princeton is Getting Around the Endowment Tax

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Seems like a win for everyone!
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Seems like it makes the endowment tax arbitrary stupid nonsense.  Don't tax Princeton but tax MIT.  Don't text Amherst or NYU but tax Notre Dame.  This whole thing just seems pointless.[/quote]

It is a Pigovian tax. It wasn’t intended to raise revenue. This is an optimal outcome, perhaps even an intended one. [/quote]

It’s kind of crappy to be a family who makes just a tad over the line (or who have more than typical assets) who will pay full price while others just a tiny bit under the line pay none. I get the rationale but it’s not optimal from that perspective. [/quote]

Totally agree - this system is very binary - all or nothing. There will be a lot of gamesmanship among families to get below the line - ironically people will have an incentive to take a pay cut for a few years. It makes very little sense yet given the constraints Princeton is dealing with, I don't blame them. But as one who is not far over the line and also had the audacity to live somewhat conservatively and save money for college, it is frustrating. But life isn't fair - I'm fortunate to have more than most other Americans and college is not a God-given right.[/quote]

Plus don't pretend that your approach to money and saving isn't helping you out in other ways. You might not be getting a college break, but there are so many other benefits you get by living this way.[/quote]

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