Harvard University is encouraging Congress to lower the endowment tax on the university to reduce the amount paid on their income from private donors, according to Inside Higher Ed, a move met with backlash from congressional Republicans.
A 2017 tax put in place by Republicans establishes a 1.4% tax on college’s net investment income if their endowment is more than $500,000 per student, according to Inside Higher Ed. Harvard’s Senior Executive Director of Federal Relations Suzanne Day is pushing for Democratic Congressmen to eliminate the tax on Harvard and other universities.
“I write to urge you to engage with Democratic senators and allies to press for action on this in the pending FY22 reconciliation bill. We believe this is one of our best chances for improvement in this policy,” Day said in an email obtained by Inside Higher Ed. “This would transform the existing provision from a politically motivated, damaging tax on charitable resources to a family-centered policy making college more affordable without debt. We believe this approach puts the reform of the endowment tax clearly within the framework for the new reconciliation bill that is being negotiated.”
“Harvard wants their endowment tax cut. I have a better idea. Let’s raise it,” Hawley wrote. “Universities have become woke hedge funds with students’ and parents’ money.”
Harvard wants their endowment tax cut. I have a better idea. Let’s raise it. Universities have become woke hedge funds with students’ and parents’ money https://t.co/xz7L78haCa
— Josh Hawley (@HawleyMO) July 18, 2022
Republican Congressman Tom Cotton has advocated for the same, proposing The Ivory Tower Tax Act, which would be a total $2 billion yearly tax increase to higher education institutions in May 2021, Arkansas Democrat Gazette reported. Harvard would be affected the most by the act since it receives the largest endowment ($53.2 billion) in the country.
Democrats have until September to finalize a Build Back Better reconciliation bill which could include a tax cut for Harvard and other universities, Inside Higher Ed reported.
Harvard University, Day, Cotton and Hawley did not immediately respond to the Daily Caller News Foundation’s request for comment.
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