Too “socialist”. Too “Sanders”.
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@ucbalumnus, you are right. That’s the con, isn’t it?
Give out tax breaks and then complain about government spending. 
I wrote about this con in another thread where people argued about preserving tax breaks that benefit wealthy institutions.
I don’t think I got anywhere …but I am glad to see you understand.
It’s true that tax breaks and government spending can have the same effect on the budget. I like truth.
@IxnayBob, I agree with you too!
@4kidsdad That was exactly my point. Ultra rich people are the enemy and their income must be distributed. But ultra rich universities are exempt because they do “good work”…not buying it.
Personal income tax has tax brackets & exemption limits. Doesn’t seem unreasonable for endowment earnings to have the same.
I have a special needs trust set up for my daughter. Any taxable income she doesn’t use above $12,000 is going to be taxed at the top income tax rate of 39+percent.
So if my disabled daughter’s trust can pay an income tax rate of 39+ percent, these schools can pay income taxes too.
Harvard’s $37,5B endowment X 4% earnings = $1.5B /year
$1.5B /~15,000 students = ~100k per year.
Why does Harvard pay no taxes, yet charges $65k/year when students could go for free? There was even a slste of candidates for Harvard’s board, which was running on a platform of free tuition for all students.
With all the unneeded income it’s raking in from fullpay families, it can afford to pay a fair share of taxes.
Who gets to determine when endowments are too large to have non-profit status? Formula based on number of students, cost of attendance and need of students? Look at other things a given university does with its endowment to see if anything is “objectionable” and thus voids non-profit status?
Should this apply to only “rich” schools with “too large” endowments or to all educational institutions? Maybe all tax exempt entities?
I don’t think the richest of the rich care if they get a tax deduction or not. Bill and Warren give away money and I think they’d give the same amounts whether it was deductible or not. Mere millionaires do care when they give a million, so if it isn’t deductible then they won’t give it or they’ll find a way to give it and still have it be deductible. Paupers in the 2% will forgo Harvard and give to their prep schools or churches or general trusts.
If the government really wanted to up revenue, the deduction to get rid of is the home mortgage one.
Warren Buffett cares big time about deductions. Don’t let that folksy manner fool you.
Absolutely the rich care about tax deductions. You don’t get to be rich by bring blasé about how you manage your money and the tax implications thereof.
These socialist threads are so repetitive and useless.
Don’t read them, then. For some of us, it’s a fun theoretical/philosophical game.
Seems to me there are a lot of threads here that fit into the repetitive category (not limited to the socialist ones). Uselessness (or lack thereof) will be in the eyes of the beholder. But that isn’t limited to repetitive threads.
Everyone has to sort through ones that aren’t applicable/interesting. Even the socialists here.
Harvard pays more than $10 million a year in lieu of taxes to Boston, Cambridge and Watertown. They’d like to get more, but it’s not as though Harvard pays nothing.
^^^ not to mention how much it brings in every year with tourism money…
That’s certainly not a principle that’s uniformly followed elsewhere in the tax code. For example, I’ve never qualified for the child care tax credit or the tuition tax credit because my income has been too high. My income was also too high to allow me to deduct interest on my student loans. At the state level, I don’t qualify for a partial rebate of residential property taxes available to homeowners and renters with low and moderate incomes. We tax large estates at death, but not smaller ones. And so on. Tax policy makes wealth-based distinctions all the time. It’s really not so hard.
What’s harder is eliminating a tax subsidy once it’s been in place for a few years, because the beneficiaries come to regard it as an entitlement. For example, the home mortgage interest deduction makes no sense at all, but by now it’s capitalized into the value of residential property. Eliminate that deduction and homeowners would scream bloody murder; everyone with a mortgage would pay higher taxes (in the short term), the value of residential real estate would take a hit because homeownership would no longer carry a lucrative tax break, and owning a home would no longer hold a clear financial advantage over renting. (The purely financial advantage of owning over renting may already be pretty thin or non-existent in many markets, but people believe it’s advantageous to own and that subjective belief itself props up home prices). The further consequence is that homeowners would take a hit in the equity they have in their homes, which for many is a significant fraction of their net worth. Over time things should even out, but that’s a hard sell politically.
We should have one big sticky thread titled something like “Harvard: The Root of All Evil.” Then whenever some thread starts blaming or hating on Harvard it can then be merged into the mega-thread for the sake of convenience.
@bclintonk - if there were some kind of cap on assets/holdings/endowment not being spent, whatever, don’t you think the Harvards and Catholic Churches of the world would simply break up into smaller organizations so as to be under the limit (actually the CC is smaller orgs, except maybe the pope’s stuff)?
Also, I believe the proper comparison to your examples would be to phasing out the tax break for the DONOR based on income, not the recipient.
I think money is better spent at Harvard than at Podunk U.
Maybe you could determine other instances where money could be better spent elsewhere. World would be a much better place, right? At least according to you.