Friday, May 02, 2008

Nerd News: Taxing Harvard's Endowment?

The latest from academia, where I expect a big fat metaphorical fistfight to break out, because no matter how rarefied and mystical you are in your ivory tower, nothing makes people go crazy faster than the subject of money, money, money. Oooooh, that filthy lucre! (Link via the blogosphere's most famous blogging academic, Professor Instapundit.)

Here's the blurb from Inside Higher Education:

With college endowments a favorite target for politicians in Washington, and many states struggling to find enough tax revenue to make ends meet, it’s almost a surprise that it took state legislators this long to start casting their eyes on colleges’ funds. But it’s perhaps not a shock that if the issue were to emerge anywhere, it would be in Massachusetts, home to the university (Harvard) whose nearly $34.6 billion endowment has become the poster child for higher education wealth.

During debate over the state’s budget for the 2009 fiscal year Monday, members of the Massachusetts House of Representatives considered imposing a 2.5 percent tax on assets exceeding $1 billion in any college’s endowment (in other words, any amount up to $1 billion would not be taxed). The measure did not win approval, with the House opting instead to ask the State Department of Revenue to study the proposal. But in the meantime, lawmakers engaged in the sort of rhetoric that has been increasingly heard in the halls of Congress in recent months, where U.S. Sens. Charles Grassley (R-Iowa) and Max Baucus (D-Mont.) this spring directed 136 colleges with endowments over $500 million to report on how they were spending those funds.

“Why do we want to tax the poor all the time, but we let off the hook the richest of the rich?” said State Rep. Angelo Scaccia, a Democrat, said during the course of Monday’s debate, according to the Metrowest Daily News. “We’re not going to break them,” he added of colleges’ endowment funds. “We just want a little.”

Personally, I find the "We just want a little" argument to be specious and disingenuous. Just want "a little"? PUH-LEEZ! It's like saying that you only want to eat one Lay's potato chip.


Anonymous said...

The question then arises, however, why does Harvard need to have $36 billion dollars in reserve? I am paying 40% of my income in taxes of one sort or another and I don't have nearly $36 billion in my accounts. If they are just hoarding the money and not using it for anything, why not reduce the tax burden slightly on the rest of us.

Anonymous said...

Of course the government wants to create a windfall profits tax on the oil companies. What's the difference. Is Harvard paying their fair share.

In the words of a Harvard Vice President," can you tax success."