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Anyone arguing that this is just government being jealous and rapacious is missing the real policy picture. Either exceptions should be made for foundations to these rules or the universities should start living by the rules.
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I think in this case it is entirely fair to accuse the Massachusetts government of merely being rapacious. They are interested in saving the state and its associated agencies from massive debt, particularly in light of a possible item on the November ballot which would ask voters whether to do away with state income tax.</p>
<p>Isn't the $1B threshold arbitrary anyway? Why not make it $500K or $100K or $0? I thinks it's a simple money grab attempt along with the mindset of some that it's just 'too much money' for the institution to have.</p>
<p>Beck was NOT saying to distribute the wealth. The whole article (this is an excerpt) shows the hypocrisy how these liberal institutions feel it is all right for the wealthy to be taxed more, or propose the distribution of wealth. But here they are using a conservative idea to argue against losing their money, the same argument they fought in the liberal arguments and stances. It was all done tongue in cheek. He was merely showing their hypocrisy - do as I say, not as I do. In the end he states he does NOT support taxing those that have excelled. As to the wealthy giving money so their kids can attend, so what? It's their money and they can do with it as they please. And a lot of that money at the elite schools is going to economically disadvantaged kids to attend, as well. Not only do those wealthy donate, but then they pay full tuition so that others can also attend. Isn't this infinitely better than the old days when if you didn't have the money you couldn't attend at all? The percentages of students receiving financial aid is going up each year at these institutions, thanks to those endowments.</p>
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As to the wealthy giving money so their kids can attend, so what? It's their money and they can do with it as they please
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<p>The point is that they do this with before-tax dollars. One might even say that the federal government matches every rich person's contribution to Harvard, (If I give $1 to Harvard, that is $.35 of that I'm not paying in federal income tax, or whatever the current top marginal tax rate is, plus whatever I'm not paying in state tax).</p>
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You keep speaking of all non-profits as the same things. This is the mistake. The goal of a university endowment is not simply to amass money; it is not simply some tool of monetary redirection. The goal of an endowment is to provide operating budget to its university, at as high a sustainable level of possible. I keep repeating this point, but it is the key: you cannot treat foundations and university endowments the same because at their core their goals and functions are different.
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<p>What?</p>
<p>I don't think you're following. Whatever the activities, needs, purposes of one non-profit vs. another, they are grouped into what in English is called a category. In this case, the category is called "non-profit." The distinction of non-profit status is one that pertains to an organization's tax treatment in relation to its earnings or lack thereof.</p>
<p>One can argue that there should be distinctions between different types of non-profits and that the entire system of distinctions between for-profit and non-profit entities should be redefined. But until those differences are codified the lack of taxing of universities' endowment income actually pretty clearly defies the spirit of the current system. Within the bounds of fairness, it is perfectly appropriate for governments to object to the exceptionalism granted to university endowments (whether or not that may cloak some hidden governmental rapaciousness, it also is fair).</p>
<p>You said the foundations exist to give away money. Yes, and in the framework of tax law, so essentially do non-profits; they exist to provide services or resources to others, not to amass profits.</p>
<p>This is a settled issue as far as I am concerned. I am out. If you don't understand the category called "non-profit" or "tax exempt status," the conversation is over.</p>