Taxing the Harvards?

[jimbogumbo]

Not agreeing with all her points, but it seems like this idea might have legs:https://www.insidehighered.com/views/2022/02/11/why-richest-universities-endowments-should-be-taxed-opinion

[dismalist]

Not agreeing with all her points, but it seems like this idea might have legs:https://www.insidehighered.com/views/2022/02/11/why-richest-universities-endowments-should-be-taxed-opinion

Harvard has been called a hedge fund with an educational institution attached.

Monies received on account of deviation from uniform taxation rules are called "tax expenditures".  These are subsidies. They are popular with lawmakers and beneficiaries because they are opaque.

On efficiency grounds donations to non-profits should be taxed like ordinary income. Income from endowments should be subject to the corporate income tax. Communities and states waive property taxes on universities. Same principle.

That all this is regressive, as per the article, is just another argument against.

If one wants to subsidize higher ed give needy customers some money. [I like Pell Grants.]

[mahagonny]

Yeah, how about the land they are hoarding when the cities could use some more affordable housing. They claim to care deeply about the disadvantaged. Another piece of their colossal ego trip. Tax the MF's.

[kaysixteen]

We could solve a lot of ed financing issues if we simply required private higher ed institutions to submit to property taxation.

[mahagonny]

Finally got the see the article. The author is, of course, a tax-and-spend democrat. Taxing wealthy universities would be a good idea to her because more taxes collected means more money for government to dole out to government programs. What is never addressed in the article is tax equity. Older people squeezed by inflation and increased cost of living having to sell their homes and move out their neighborhood or into a tiny apartment for the elderly because they can't afford the real estate taxes doesn't interest her. She doesn't make her fatass professor salary by calling attention to boring subjects like these. More taxes collected from filthy rich universities could mean tax relief for homeowners.

[mamselle]

Yeah, how about the land they are hoarding when the cities could use some more affordable housing. They claim to care deeply about the disadvantaged. Another piece of their colossal ego trip. Tax the MF's.

The land in the latest (Allston) expansion does include public-benefit storefronts and housing; the latest plans for a redesign of the Athletic club will include a complete overhaul of a city-botched sidewalk structure, perpetrated when a highway went through the back of the area. A pedestrian-friendly space will open up from a long-blocked off, impassable alleyway.

Other expansions include affordable public housing units. The redo of a student center maintained open public areas, cafes, and the quirky, long-standing outdoor chess/checkerboard tables in place since the 1960s or so.

A bridge passover has play spaces, tents, heated fireplaces in the winter, and a food-truck area all open to the public. Most food service areas are also in public spaces, and while student cards are honored in them, no-one is refused service. Many, many conference offerings, speakers' events, and even more closed-community programs admit known attendees affiliated only by an interest in the subject matter.

In some cases, the building accommodations are in response to locally mandated planning permission riders, but the expectations are in the plans and are well-designed, with good will and an open-campus format wherever possible. The city historian has to sign off on many of these, and construction can and has been stopped for archeological findings during a dig.

As for the tax issues, one might want to balance the size of the plant and staff maintained by the endowment; when stock values drop, lay-offs happen, mostly among those whose employment supports the local economy to a rather great extent. So the school is not just sitting on the endowment, its yield is in active use.

The school has many problems and issues, of course. But it has some strong, good qualities as well.

M.

[Hibush]

Finally got the see the article. ...She doesn't make her fatass professor salary by calling attention to boring subjects like these. More taxes collected from filthy rich universities could mean tax relief for homeowners.

It should be noted that Middlebury's outsized endowment pays that fatass professor salary. Or 17% of it anyway.

These articles come up on a regular basis, but rally there are only four schools with endowments that fit the model that is decried. But those examples are used to argue for garnishing the funds of hundreds of institutions that are seeking to educate students with some financial prudence.

One of those making this argument was a politician near me...which strained relations with private colleges in the politician's district. But there, the motive was unambiguously stated: stick it to those pointy-headed academics who make us feel bad.

Does that mean the contempt for college finances is bipartisan?

[mahagonny]

Finally got the see the article. ...She doesn't make her fatass professor salary by calling attention to boring subjects like these. More taxes collected from filthy rich universities could mean tax relief for homeowners.

It should be noted that Middlebury's outsized endowment pays that fatass professor salary. Or 17% of it anyway.

These articles come up on a regular basis, but rally there are only four schools with endowments that fit the model that is decried. But those examples are used to argue for garnishing the funds of hundreds of institutions that are seeking to educate students with some financial prudence.

One of those making this argument was a politician near me...which strained relations with private colleges in the politician's district. But there, the motive was unambiguously stated: stick it to those pointy-headed academics who make us feel bad.

Does that mean the contempt for college finances is bipartisan?

He was a democrat, right?     https://www.livescience.com/639-republicans-happier-democrats.html

ETA: Sincere questions: Why do so many smaller colleges' humanities, history etc. departments try to imitate places like Harvard and Princeton? Will they continue to, now that radical left agenda is being discussed constantly in the media (and, increasingly, bruised), the alternative-to-DJT POTUS is sinking like a stone in the polls and parents are pushing back against changes in school curriculum? Is it possible that a political tide turning against the trends that hatched in higher education could actually affect what higher education does?

I don't hear any contempt for college finances from this author. Offering to pay your taxes is a way to get more goodwill. Tenured faculty and administration are working together. Elites tend to do that.

[jimbogumbo]

We could solve a lot of ed financing issues if we simply required private higher ed institutions to submit to property taxation.

I think this is better than the proposal re endowments, and more likely to happen. Yes, costs would be passed on to consumers. Yes, local tax districts could choose not to assess the tax.

What Penn did a couple of years ago should imho be a route chosen by more universities, especially in under-financed cities/counties which must use property taxes: https://hechingerreport.org/activists-question-whether-wealthy-universities-should-be-exempt-from-property-taxes/

[mahagonny]

We could solve a lot of ed financing issues if we simply required private higher ed institutions to submit to property taxation.

I think this is better than the proposal re endowments, and more likely to happen. Yes, costs would be passed on to consumers. Yes, local tax districts could choose not to assess the tax.

The cost doesn't have to be passed on to the consumers. It could be borne by the Professor who wrote this article and her colleagues who feel strongly about giving back to the community, by taking smaller salaries, making it possible for the schools to pay their real estate tax.

My wife is upset because she thinks Joe Rogan is a hateful, flaming bigot. So I suggested we stop funding Spotify and Netflix (bundled together) and she answered, 'no wait and see how the confrontation (between Neil Young, Carly Simon et al versus Spotify, Daniel Ek, Rogan) plays out.'
Not wanting to argue, I didn't bother to point out that you're not standing up for a principle when you wait to see which side is winning and jump in with them. You're standing for a principle when you will endure something you wouldn't normally choose in order to advance it.
Put your money where your mouth is.

[dismalist]

How costs are passed on is well understood: The side of the market that is less sensitive to price changes pays a higher share of the cost change.

The cost doesn't have to be passed on to the consumers.  It could be borne by ... .

A charity.

[mahagonny]

How costs are passed on is well understood: The side of the market that is less sensitive to price changes pays a higher share of the cost change.

The cost doesn't have to be passed on to the consumers.  It could be borne by ... .

A charity.

Who knows? I recall Donald Trump and Mitt Romney declining their salaries.

ETA: Tenure academics think a little differently. They already believe they are already giving back to the community in that their nearly unanimous opinion is they are underpaid.

[dismalist]

giving back to the community

Back? Who stole what?

their nearly unanimous opinion is they are underpaid.

Everybody thinks they're underpaid.

[mahagonny]

giving back to the community

Back? Who stole what?

Nothing was stolen, yet academics are so generous that they give back to the community anyway. Well, technically it's the adjunct faculty who do that. But tenure track would be doing that if only you could afford them, so the sentiment is identified correctly.

They could make more money somewhere else (except the ones who couldn't), but trade higher income for guaranteed employment. Normally this is called something like 'bargaining' but academics call it 'how noble we are.'

So if the municipality needs more tax revenue, why don't the generous people step up? They love that sort of thing.

OK, so much for how I feel about it...there's still:

As a practical question, whereas higher education institutions seem to be a bit less popular lately than they used to be, one way to make them more popular would be to kick in more taxes. So I'm pretty sure this author has thought of that, and why someone else needs to do something about it so people like her can stay in clover; that, to me, is the subtext of the article.

[apl68]

Over the weekend I read Beyond the Crossroads:  the Future of the Public University in America, by James J. Duderstadt and Farris W. Womack.  They were advocating back in 2003 that the hugely wealthy private Ivy League schools should be taxed, since their tax-exempt status amounted to a huge public subsidy to schools that didn't really need it, at the expense of public schools that really did.

Lots more stuff besides, on many of the issues that we've discussed at the Fora over the years.  The authors were, for a time, respectively the President and CFO of the University of Michigan a couple of decades back.  I don't imagine they've been too happy at what has happened to the Michigan system of higher education during the 2000s.