Early efforts fell flat, but experts believe this is just the first salvo in a long-term strategy.
Prominent Republican lawmakers are pushing a new strategy to tax university endowments, arguing that universities don't deserve tax-exempt status because they spend vast amounts of money promoting “woke” bigotry. are doing.
Early efforts in Congress appear to have stalled so far, but watchdog groups are warning higher education leaders that the strategy is just getting started.
“Due to continued public interest and concern about the value and cost of a college education, some legislators are seeking to garner voter support for scrutiny of higher education business practices,” the American Association of College and University Administrators recently said. This was stated in the policy memo. .
The association warned in December of a bill proposed by U.S. Sens. Tom Cotton and J.D. Vance, who both used the word “woke” in promoting the initiative.
According to his office, Vance's proposed University Endowment Responsibility Act would “raise excise taxes on the net investment income of endowments starting at 1.4% for private, secular universities with at least $10 billion in assets under management. The aim is to raise it to 35%.
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Cotton's bill is called the Wake Endowment Security Tax Act of 2023. He was seeking to impose a 6% excise tax on endowments at 10 U.S. universities, according to a news release from his office.
On December 14, Vance's proposal was blocked on the Senate floor.
Prior to the action, Republican senators had argued that the university's endowment had grown “incredibly large on the back of taxpayer subsidies.”
He singled out three universities in particular, Harvard University, Massachusetts Institute of Technology and the University of Pennsylvania, whose endowments are approaching $100 billion, adding that they rival some of the largest hedge funds in the United States.
“It has to stop because it enables political insanity. This system has burdened the entire American population with over $1 trillion in student debt, and many of our friends on the other side are living in Ohio. “It has to stop because it’s costing all Americans the student loan relief they want their state plumber to pay,” he said. “But if the university caused the problem, I think the university should pay for it.”
Vance's office did not respond to a request from university fix Vance is seeking comment on whether he will introduce similar legislation in the next Congress.
Cotton's proposal aims to raise $15.47 billion by taxing university endowments for specific purposes, including “Israel's war against Hamas, Ukraine's war against Russia, and our southern border.” It will serve as a source of funding to support efforts to ensure that The secretariat announced this in a news release.
The tax would only apply to private secular institutions with endowments of at least $12.2 billion, or groups with endowments of at least $9 billion that also operate state contract universities, his office said. Stated.
“Many of America's so-called 'top' universities have failed to condemn anti-Semitism and violence against Jewish students on their campuses. We should impose this tax on these school donations. Taxing the billions of dollars these schools accumulate would be more than enough to pay for aid to Israel and security at our southern border,” Cotton said.
The bill was introduced in mid-December but has not yet been taken up on the Senate floor.
The media relations departments of Harvard University, the Massachusetts Institute of Technology, and the University of Pennsylvania would have been taxed under all of these proposals, but they did not respond. college fix Request for comments.
In addition to the two senators, university fix It was previously reported that former President Donald Trump proposed taxing the endowments of large private universities to pay for the free online “American Academy.”
Policy experts disagree on this tactic.
But other Republicans are also discussing the strategy more, as the American Association of University Administrators noted in a policy memo.
They cite Rep. Beth Van Dine, R-Texas, who raised the issue during a Dec. 13 House Ways and Means Oversight Subcommittee hearing focused on growth in the tax-exempt sector.
She pointed out that while universities enjoy such benefits, “universities have become breeding grounds for left-wing indoctrination, often at the expense of student safety and well-being.” Recent reports of violence against Jewish students on college campuses are just the latest example. ”
Asked about the effort to tax donations, Tim Sherratt, a political science professor at Gordon College, said he believed the effort was “probably doomed to fail like Vance.”
However, he added in an email: university fix“There is no question that this side of the 'anti-woke' movement has momentum.”
Read more: President Trump's proposal for an online university, the American Academy, has mixed reviews
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