Republicans in Congress weigh tax increases for high university wealth

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Republicans in Congress are seeking to bring billions of dollars in taxes from US high -private university funds by raising investment return rates between a wider attack on Elite Academia.

At least three proposed bills since January aim to increase the tax level for investment returns to 21 percent, from 1.4 percent currently. Two of the bills would also lower the threshold at universities by as little as $ 200,000 in student assets compared to the current $ 500,000. Growth can rise up to $ 112 billion over the next decade, according to the non -profit tax foundation.

Dozens of the country’s richest schools would undergo taxes if approved, including Harvard, Stanford and Princeton. Universities invest fund assets and use profits to finance all types of operations, including professor salaries, financial aid, student scholarships and campus activities. For some, such as Harvard’s $ 50bn fund, investment returns are the only largest source of funding for the school, which represents more than a third of the revenue.

Proposed tax increases are the latest in a multitude of financing uncertainties and threats to higher education held by university officials to advantage since US President Trump took over in January. Schools across the country have already seen billions of dollars in federal research grants and other funds to be endangered or disappeared, causing doubts about their motivation and worrying about the influence of university finances and affordability.

“The structure simply structured to receive money from the institutions and send them to Washington,” said Steven Bloom, aide to Vice -President of the Government Council for Education, who represents universities and colleges. He added that 48 percent of funding costs went towards financial aid. “If the goal is to provide financial assistance, the tax will undermine it.”

A spokesman for the Republican Troy Nehls representative of Texas, who proposed the invoice at a 21 percent tax rate, said its main goal was to “bring equality between tax rates paid by individuals and businesses for their investment income and taxes paid by large university funds”.

A senior official from an association representing universities said that gift tax proposals – along with other funding cuts and recent attacks on higher education by the Trump administration – had sparked “uncertainty and chaos” in camps.

The act of lowering taxes and jobs from Trump’s first term imposed a 1.4 percent tax on the country’s richest private universities donations for the first time, an unusual action given their historical treatment as non -profit institutions. Only 56 institutions had to pay in 2023, reaching $ 380 million.

This time around, the smallest gifts can also fall victims. One of the bills presented last month by representatives Dave Joyce from Ohio and Nicole Malliotakis from New York aimed to impose capital profits on schools with a minimum of $ 250,000 on student fund assets.

“Small schools are simply not strong enough to withstand more money from their gifts,” said John Griffith, a director of Hirtle Callaghan & Co and the former financial officer at Bryn Mawr College. “They have much less financial flexibility.”

While bills are not far from law, universities are in panic because proposals appear to have support from the White House. In 2023, while Senator, JD Vance pushed to increase the tax on rich institutions to 35 percent – 14 percentage points higher than steep proposals from this legislative session.

Although the proposals do not clearly cite the liberal ideology of the campus or the latest protests on the Israeli-Hamas war, some university officials have suggested privately that they are a motivator.

“This is a way for the current administration to punish some of the biggest institutions they believe have indoctrinated students with a smart ideology,” said one university official. “If you see the projected income that such a tax would actually produce, it is laughing… Reduction of resources available to institutions will erode our higher education system.”

Senator Tom Cotton of Arkansas discovered the so -called Woke Entowment Tax Tax Tax on Tuesday, proposing a 6 percent tax on the country’s richest private schools. “Our elite universities should know the cost of pushing anti-American and pro-terrorist agendas,” Cotton wrote on Tuesday.

Only fear of higher taxes already has an impact. Stanford and Cornell universities have cited the increase in the creation of freezing employment.

Meetings are working in Congress while the White House accumulates further pressure on financing high universities. Last week, the Trump administration canceled about $ 400 million in federal grants and contracts at Columbia University in New York.

The withdrawal of federal support for Colombia continues to the National Health Institute of Health Institute that it plans to cut federal spending up to $ 4 billion a year for research projects across the US – the cuts that scientists have warned will be catastrophic for research universities.

“The possibility of this university depends on the donation,” said Christopher Eisgruber, the president of Princeton, during a Municipality for staff in February, a registration of which was seen by the Financial Times.

“If the fund is taxed, the consequences should be returned to some of what we do.”

Visualization of data from Sam Student