New GOP bill seeks to hold private universities to same tax standard as corporations: ‘On notice’
The Endowment Tax Fairness Act is a new GOP-backed bill that aims to significantly increase taxes on endowment profits held by private universities. This bill would raise the tax rate on annual private university endowment investment returns from 1.4% to 21%, aligning it with the current corporate tax rate.
The revenue generated from this increased tax would be deposited into the General Fund of the Treasury to help reduce the national deficit. Rep. Troy Nehls, R-Texas, the lawmaker behind the bill, believes that elite universities should not have lower taxes than working Americans.
Nehls argues that private universities with massive endowments are paying far lower taxes than most hardworking Americans. He points out that these institutions have significantly increased tuition fees, which have far surpassed the average annual inflation rate.
The tax imposed by the Endowment Tax Fairness Act would apply to private colleges and universities that meet specific criteria, including having 500 or more students. Universities with assets totaling at least $500,000 per student and with more than 50% of their student body in the United States would also be subject to this tax.
Some of the universities that would be affected by this tax increase include Harvard, Yale, Princeton, and Columbia, which collectively hold $270 billion in assets under management. Nehls believes that it is unacceptable for these institutions to have such massive endowments while paying minimal taxes.
If the Endowment Tax Fairness Act is passed, the tax increase would take effect immediately after the bill’s enactment. This legislation is aimed at holding elite universities accountable and ensuring that they are taxed at the same rate as corporations.
Overall, the goal of the Endowment Tax Fairness Act is to create a more equitable tax system for private universities and generate revenue to help reduce the national deficit. By raising taxes on endowment profits, this bill aims to address the disparity between tax rates for elite universities and working Americans.
