<p>Wasn’t there an effort a few years ago, led by Senator Grassley to have universities pay taxes on their endowments unless they used a certain percentage of the income each year for scholarships, etc? I don’t know where that went. But it seems to me that some of these universities are earning millions on their billion dollar endowments and they should either use it for charitable purposes or pay taxes on it.</p>
<p>
</p>
<p>The problem with this sort of argument is that it “proves too much.” Many kinds of for-profit businesses could make similar arguments, with just as much justification, yet they are required to pay property taxes. Senior citizens and other childless persons pay property taxes even if they don’t have school-aged children. Property taxes aren’t fees for services rendered. They’re a way of spreading the cost of public services that benefit the community generally, across (ideally) the entire economic base of the community. If Princeton University were to pick up and relocate, and sell its New Jersey property holdings to a for-profit business–say a for-profit college, or maybe a fantasy resort where the guests got to pretend they were Princeton students–that business would be required to pay property taxes, even if it represented no more a burden in terms of public services than Princeton University currently does.</p>
<p>Besides, I don’t buy the argument that the university doesn’t use or benefit from local public services. If a fire breaks out on campus, it’s the local fire department that will respond. The university may have its own security force, but it also wants its students, faculty, and staff to be safe when they venture off the university grounds, and it’s the local police department that makes that happen. If a shooter holes up atop Nassau Hall, it’s not just the university’s amateur rent-a-cops but state and local law enforcement who will respond. The university has an interest in the town’s streets and sidewalks being paved and well-maintained, its streetlights lit, its building and zoning codes enforced to keep the community attractive and appealing, and its businesses properly licensed so Nassau Street doesn’t turn into a strip of dive bars and honky-tonks (well, on second thought, that might make it more interesting . . . but I don’t think that’s what the university wants).</p>
<p>The Internal Revenue Code determines which not-for-profit institutions are exempt from federal income tax, and which get the additional (and extremely valuable) benefit of tax-deductible contributions. States typically piggyback their state income tax laws on the federal provisions, because it’s much simpler to administer. But states get to decide which institutions are exempt from state and local property taxes, and those requirements vary from state to state and are not always the same as the Internal Revenue Code. </p>
<p>Most states–45, I think–require that to get a property tax exemption, the property must be used for “charitable purposes.” Under that standard, mere ownership by a non-profit is not sufficient for the property tax exemption, and many kinds of non-profits—industry trade associations, for example—may not qualify for property tax exemptions even though they’re exempt from federal and (in most states) state income taxation. An important public policy question is whether the kinds of charitable purposes served by colleges and universities justify placing the burden of their non-payment of property taxes on local governments (and local taxpayers), insofar as those charitable benefits don’t accrue principally to local beneficiaries. </p>
<p>An important legal question is, given that modern private universities are extremely complex and sophisticated financial and economic players engaged in a wide range of economic activities, are they still “charities”? Are all of their activities “charitable,” and if so, in what sense? Most state statutes don’t define what counts as a “charity,” but those that do usually define “charity” by reference to things like “relieving government of a burden,” “relieving poverty,” and “benefiting the public generally.” One might argue that’s not what today’s Princeton is really about, or only part of what it’s about. Its research certainly has public value, but to the extent that value is captured by patents held privately by the university for its own benefit, that public benefit is arguably compromised. And on the educational side schools like Princeton seem to operate primarily for the private benefit of the lucky few who attend, who are not mainly the poor but rather disproportionately affluent. </p>
<p>I’m not saying I necessarily endorse these arguments. But granting extremely valuable property tax breaks to wealthy, multibillion-dollar economic enterprises is not just the natural order of things, to be accepted without questioning because we’ve always done it that way. I think legitimate questions are raised by the opponents of these tax breaks, and universities must be prepared to have better answers than “It’s always been this way” or “We’d have to raise tuition on the affluent if you make us pay our fair share.”</p>
<p>
Correct! While I agree that property taxes are just because education (presumably the most relevant object that the taxes are used for) is a public good, that does not obviate the fact that the tax code has historically recognized the tax-exempt status of educational institution property used towards a mission defined by the tax code. The NJ Statutes Title 54 holds the following:
Thus, Princeton has been historically exempt under this. Currently, plaintiffs are challenging the University’s “profit-making” status. While the University does profit from ticket sales, food from the Frist gallery, etc. these profits allegedly go towards educational purposes, funneling down to the academics (whether to use for their research or not is not clear). Thus, the profits are being (allegedly) used for educational/research purposes, which is exempt from taxation. I have not yet seen an analog in which an institution whose mission is education and research has been compelled to pay property tax on property utilized for that purpose. The court would be setting a dangerous precedent indeed. </p>
<p>
While I agree that the University benefits from local public services to a degree, the University also contributes to those services. For instance, dozens of University employees are volunteer firefighters in the Princeton fire department, not to mention several students. The ambulance service is staffed by many Princeton students, all as volunteers. The mere presence of the University provides free labor for these services (and the ambulance service is even a for-profit organization! It charges students when students utilize its services!). Thus, while the University may utilize these services, it definitely contributes a significant part to these services, providing a source of free labor. Also note that the University Public Safety service is not a “rent-a-cop” police force. Members are fully sworn-in law enforcement officers who are issued handguns (they don’t carry them for PR reasons). These are fully functioning policemen. </p>
<p>
Now you’re talking about two separate jurisdictions. If I travelled to Newark, NJ, I would hope to be protected by local law enforcement, even if my property taxes do not go towards their funding. That is the essence of a non-compartmentalized society. It’s not like if you go from your town to the next one over, you should be obligated to contribute to the local police force in order to receive their protection. </p>
<p>
I may be wrong on this, but I think the reason the University is tax-exempt is because it is an educational institution, not because it is a charity organization. Education is recognized as a public good and so should be exempt from taxation. Though I am not too interested in the tax code, so I may be wrong. However, the University still contributes over $10 million to the township every year. The plaintiffs are asking that it pay a total property tax of $28 million. Though it does not justify a comprehensive defense of the University’s non-tax-paying status, I do question why the town is seeking more. As I stated in an above post, Princeton is a relatively affluent town and Princeton High School is a very strong school, offering every AP class. I do not see any justifiable purpose to compel the University to pay a property tax. Why not use that money for its education/research mission? Or does everybody just want a chunk of the mountain of money the University is sitting on? </p>
<p>
I could not disagree more. Over 60% of Princeton students receive some sort of financial aid. As a student from a low-income background, I could not have come to Princeton had it not offered me a more-than-generous aid package. Additionally, I have found that the majority of my friends are on financial aid. Perhaps the Princeton of the past was the privilege of the few, but today, Princeton is drastically different. Most of my friends and I could not come to Princeton if not for financial aid. Another significant question raised by this whole debate is what will happen to financial aid if a property tax is levied on Princeton? I suspect that we would see a drop, however small, in the grants the University gives to students (keep in mind that these grants are no strings attached and do not need to be repaid). And to many students, myself included, even a small drop in the aid package could make a big difference in our ability to attend Princeton and fulfill our dreams. </p>
<p>
While the University might be an “economic enterprise”, its wealth was hardly accumulated by its so-called “business ventures”. You can only make so much selling tickets and food. I suspect that the vast majority of the $17 billion endowment stems from donations from a long list of distinguished alumni. Princeton has the highest rate of giving back from alumni out of any University. And as a student here, I can see why. Princeton makes dreams come true. And when those dreams come true, alumni give back to the institution that made it all happen. So it’s not as simple as granting tax-breaks to the wealthy. It’s whether we should grant tax-breaks to donations to an educational institution. Presumably, those donations come from alumni income, which has already been taxed. After the donation, is big brother going to levy a tax on that money again? In an era of increasing large government and increasing taxation, we should stand resilient and be skeptical about any unorthodox means to increase revenue on part of the government, and those who advocate on behalf of the government.</p>
<p>Sure, let’s tax all non-profits. Let’s start with Princeton, then the Red Cross, and then churches. Slow news day at the Wall Street Journal? Honestly we (meaning the local residents around Princeton and similar schools) should be thankful to have the universities. Instead they’re complaining that Princeton has a high endowment to student ratio. Shouldn’t they be celebrating that and congratulating Princeton on it’s successful management. Since when do we punish fairly earned success? Honestly you expect this kind of stuff from the Huffington Post, not the Wall Street Journal.</p>
<p>
</p>
<p>Curious argument. If it’s a volunteer fire department, then presumably all the labor is free, whether provided by college students or other town residents. Yet in the volunteer fire departments I’ve been familiar with, no one ever thought their volunteer labor entitled them to a property tax exemption. </p>
<p>
</p>
<p>I agree that education is in part a public good and to that extent should be subsidized, either directly through legislative appropriations, or indirectly through things like government subsidies of tuition (grants, scholarships, loans) or government support for university research, or through provisions of the tax code that make colleges and universities exempt from income taxation. It is also a private good, insofar as the principal beneficiary is its recipient. Part of the question here is, when you’re looking at a small elite college that directly serves only a small number of people, which predominates–the public good aspect, or the private good aspect? </p>
<p>But even to the extent elite private education does provide a public good, I would question the fairness of compelling local host communities to shoulder the burden of property tax exemptions when the public good benefits occur primarily outside the host community. In short, I’m not sure Princeton University should be paying more, but the question is whether Princeton University should be subsidized by the residents of Princeton Township, NJ, or by the taxpayers of New Jersey or by the taxpayers of the United States. But perhaps Princeton is the wrong place to have this discussion. Consider New Haven, where Yale Univeristy and Yale-New Haven Medical Center are pretty much the only significant economic players in an otherwise deeply economically distressed community. Is it fair to ask the residents of New Haven to subsidize Yale through favorable local tax treatment? Or should Yale instead be subsidized by the residents of Connecticut, or the United States? </p>
<p>
</p>
<p>Princeton’s financial aid is indeed generous. But the fact that 59.4% of Princeton students receive some level of need-based FA doesn’t obviate the point that Princeton disproportionately serves the affluent. I don’t follow Princeton’s FA policies in detail, so please correct me if I’m wrong, but my understanding is that Princeton routinely grants need-based FA to students from households with incomes up to $180,000. If that’s right, it means that over 40% of Princeton’s students come from the top 5% highest-income households. It also means that most of those receiving FA at Princeton are more affluent than the national median. Only 10% of Princeton University students receive Pell grants, even though some students from families with incomes up to $50,000, or roughly the median household income, are Pell-eligible.</p>
<p>
</p>
<p>I think its wealth was largely accumulated on tax-free returns on investments of tax-deductible contributions. The value of of those public subsidies is enormous. </p>
<p>
</p>
<p>Well, I dunno. My mother-in-law gave me a check for my 60th birthday out of her income which had already been taxed. I invested it, and the earnings on that investment are taxed. If the investment does well and ends up worth more than I paid for it, and I cash that out, the capital gain will be taxed. If I use those proceeds to buy real estate, that will be taxed. You say, “Oh, but that’s private, it’s not for education.” But in fact an extraordinary fraction of my income, including earnings on my investments, is going to pay for my daughters’ education, and if any is left over, it will probably go to my grandchildren’s education. Should that not be taxed? Am I not double, triple, quadruple taxed, and yet contributing to exactly the same kind of public good Princeton is contributing to?</p>
<p>
I was referring to the University getting a tax exemption, not the fire department itself. Because you are correct in that the University itself does not field a fire department. I’m not saying this by itself justifies a tax exemption, but it at least counterweighs the argument that the University is using these services, so it should be paying for them, in part. So yes, while the University does use these services, it also provides a significant source of free, volunteer labor. That should count for something in these calculations, at least counterweighing the argument that the University should be paying for its use of these public services. </p>
<p>
Yes, if you look at it in a small scale, it may seem like only a few benefit from this education. However, Princeton is a premier research institution. One can make a quite compelling argument that the research produced by students and faculty at Princeton definitely contributes to the public good - i.e. labs searching for cures to cancer, engineering projects that better ecosystems around the world, and, believe it or not, Teach for America was a senior thesis project that a student turned into reality (all funded in part by the University). I would argue that these research/education efforts, though only accessed by the few undergraduates here, are huge steps towards a public good. Unless one believes that eliminating education inequity is not a public good, that is (the Teach for America undergraduate thesis). </p>
<p>
I have yet to see hard data on the burdens exacted on the local community by the University. As I said, the University already contributes over $10 million to the community annually and students from the area regularly come to the University to take classes. Not only that, but undergraduates represent a significant source of commerce - at least to the business community in the vicinity of Nassau Street. If Princeton University were to pick up and move away, those businesses would definitely cry bloody murder! And the revenue generated by those businesses funnels back into the town in the form of sales taxes and various other taxes. So the “burden” put on the town may be slight indeed. </p>
<p>I’m not too clear on the actual FA statistics either, but it is quite possible that many of those receiving FA at Princeton could be relatively affluent (compared to their peers at other schools). However, we’re still looking at $116 million a year in financial aid for students. All of this is in the form of grants, which do not need to be repaid. So, essentially, that’s $116 million down the drain every year that the University knows it’s not going to be getting back (well, it will, in the form of voluntary alumni donations, but we’ll get to that later). Now, that may not be a lot in face of a $17 billion endowment, but a lot of the endowment also goes towards research funding, which, I’m sure we’ll agree, is a public good. </p>
<p>So I think it is worth it, even if the FA only significantly impacts a smaller percentage of students, to keep that FA coming. That is, if FA decreases, less well-off students will be able to attend Princeton, reducing the demographics of the University to those of an affluent, white background. Think of it this way - FA reduces education disparity between the rich and the poor. So even if the poor are a minority at Princeton, without the high level of FA, they would be nonexistent there. Now, how taxation would affect FA appears to be seen. </p>
<p>Another thing is: there have been many recent concerns about the rising costs of a college education. Princeton has come the closest to making a quality education available to all, WITHOUT making its graduates incur a debt (if there is one, it is VERY much smaller than other college debts). This is something to be applauded, not punished, in the wake of large increases in tuition at top universities. What do you think will happen to Princeton’s FA budget if it gets hit with a whopping $28 million property tax? </p>
<p>Now, the concept of a public good does not have to be justified by local benefits. For instance, a senior couple pays property taxes - a large part of which goes towards public school funding. When kids from those schools graduate, they leave the community to go to university and very likely later work in a different place than where they grew up. Now, it can be argued that the senior couple is being taxed for a good that, while being public, has no (or minimal) local effects. </p>
<p>
Yes, while Princeton earns money on capital gains from contributions, those contributions form the majority of the wealth. Unless you are suggesting something like 100% return on the investment every year. How else would you be able to explain the $17 billion endowment? If I had even $1 million and could turn it into $17 billion, I wouldn’t even be going to Princeton - I would be some CEO on Wall Street. The point is, you need a significant amount of capital to get that much money. Seeing as Princeton is only getting single-digit returns on its investment. See this link for an interesting article: [Princeton</a> University - Princeton endowment earns 3.1 percent return, boosts 10-year average](<a href=“http://www.princeton.edu/main/news/archive/S35/06/60S04/index.xml?section=topstories]Princeton”>http://www.princeton.edu/main/news/archive/S35/06/60S04/index.xml?section=topstories)</p>
<p>As you see, in the wake of a 3.1% investment gain, the University increased its financial aid budget by 5.6%. There is possibly a correlation here. At the very basic level, the University increased its FA budget when it received an investment gain. I speculate that some, if not a large part, of that gain is going into funding FA, which, as I argued above, is a good thing. </p>
<p>
Yes, I believe that the University might be taxed for capital gains. I have no objection to that. But I believe that a capital gains tax is only levied on what you make, NOT the capital. For instance, if I have a $1 million investment that made $100,000, I would be taxed on the $100,000, NOT the $1 million. Similarly, I can claim some sort of deduction for a capital loss? (not too sure about this aspect) The point is, taxing the University on property because it is making money on investments is not right and, frankly, doesn’t make much sense to me. Tax the earnings, why the property? </p>
<p>I think that, on the most basic level, Princeton is contributing to a public good, providing education for many. You are contributing to an individual good - namely, your daughter’s education. Even allowing that you are contributing to the same SORT of good, you are still allowed education deductions on your tax return if you are claiming your daughter as a dependent (which I am assuming you are, if you are paying for her education). So some of that money is being shielded from the income tax.</p>
<p>
</p>
<p>You misapprehend my point. Consider my friend Tom. Tom owns a farm, on which he pays ad valorem property taxes based on the fair market value of his farm. He’s never had a fire, and he’s likely never to have a fire, yet part of his property taxes go to pay for the volunteer fire department in his community. He does not object because he thinks he, like everyone else in the community, benefits from the fire protection provided by the fire department, and even though statistically it is more likely that a fire will break out in a house or apartment in town than on his farm, he thinks it serves the common good that everyone is protected in the event of fire. He also serves as a volunteer fire fighter. Yet he doesn’t think he’s entitled to a property tax exemption because he puts in that volunteer labor. </p>
<p>Now substitute “Princeton University” for “Tom.”</p>
<p>
</p>
<p>Well, we can quantify some of this. Princeton has a $17 billion endowment, correct? If it’s like most universities, Princeton takes a 5% annual payout on endowment whether the endowment gains or loses in value (typically the payout is based on a 3-year rolling average of endowment value so as to soften any upward or downward spikes in value and to make the payout more predictable, but that detail need not detain us). At that rate, Princeton can expect a payout of about $850 million/year. Princeton spends slightly over $100 million/year on institutionally-sourced financial aid, according to its Common Data Set. Conclusion: the fraction of Princeton’s endowment payout going to financial aid is not trivial, but on the other hand it’s only a bit less than 12% of the total payout. So a relatively small part of Princeton’s investment gain is going to FA. But I totally agree, FA is a good thing. I wish schools like Princeton would admit more people who need large amounts of FA. Then I’d be more convinced that their public benefits outweighed the private benefits they provide to the direct recipients of said benefits.</p>
<p>
</p>
<p>Uh-oh. Careful. Princeton’s not going to want to hear that. That exemption–the ability to see their endowment grow not just tax-deferred but entirely tax-free, and never having to pay capital gains tax when they cash out–is undoubtedly worth far more to them than some measly local property tax exemption. They’d trade the latter in a New York minute if that’s what it took to protect the former.</p>
<p>
</p>
<p>Well, no, actually there are income-based limitations on deductibility of education expenses, and we don’t qualify. That’s painful, but I can’t object too much; we’re blessed to be financially well situated enough that I can live with it. And yes, my daughters are the principal beneficiaries of their own education in a private capacity; it enhances their earning power, it makes them more effective leaders in their communities, better equipped to advocate for their own self-interest or for causes they believe in, and most importantly it confers on them lifelong benefits in the form of a richer intellectual life, a finer and more nuanced appreciation for literature, art, music, and more, critical thinking skills that will serve them well in a variety of capacities, and on and on. But their education also has a public good aspect, insofar as it makes them more engaged and more effective citizens and more productive participants in the economy. A Princeton education provides its recipients this exact same combination of private and public benefits. So, granting that higher education does contribute to the public good, you still haven’t explained to me why, if the private good outweighs the public good in the individual case, nonetheless the public good outweighs the private good when that individual case is multiplied by several thousand.</p>
<p>bclintonk: au contraire, your argument “proves too much.” The allegations put forth by the town of Princeton are that “other uses” of the land would reap more in tax benefits, so the town loses out by having a non-profit there. The response is, “Yes, but other uses of the land would also cost more.” </p>
<p>Going into for-profit businesses or going into the hyper-specific situations of families with two kids versus one kid is irrelevant to the subject of a town’s actual expenses associated with a non-profit university.</p>
<p>This well-reasoned, earnest, and civil discussion might be one of the better arguments for tax code simplification.</p>
<p>
I would point out here that many for-profit businesses do get tax breaks and other goodies in order to lure them to localities or convince them to stay there.</p>
<p>
</p>
<p>How do you know that they are NOT using it for charitable purposes? Where do you think some of the financial aid comes from? It costs perhaps $80k+ to educate an undergrad at a top school like P’ton. Thus, tuition does not cover the education bill; instead, tuition is subsidized by the endowment earnings.</p>
<p>
</p>
<p>That is not enough to maintain the tax exemption. For example, if P’ton started showing first run movies in Nassau Hall, open to everyone at $15/head, the “profits” would be taxable income, and must be reported as UBIT on their Form 990. They cannot just use the excuse that they are sinking the profits into educational purposes, such as financial aid or tuition breaks for low income. The use of the funds is not relevant to the feds, if they are clearly earned in a manner that looks like a movie business, walks like a movie business…</p>
<p>There is the classic case in NYU which was running a cafeteria/food service for its students and faculty, but the cafeteria/restaurant was also open to the public and thus, competing with local tax-paying restaurants in the Village. NYU’s tax exemption was challenged by those locals being harmed. NYU took the case to the Supremes and lost.</p>
<p>
</p>
<p>That’s a fair question, but so is the opposite: how many local tax-paying businesses would not exist if the University did not exist? What about millions (?) in tourism dollars pumped into the local economy from those taking the annual college tours? Or visiting faculty members?</p>
<p>
Counterexample: University of Phoenix (Apollo Group)
How transparent are the PILOT negotiations in Princeton?
Why is a high endowment/student ratio “success” in this context? We are talking about a non-profit institution, correct?
Just curious…how do they calculate that?</p>
<p>
</p>
<p>Again, that argument “proves too much.” Any business that is dominant in its hometown could make the same kinds of arguments. Caterpillar, the construction equipment manufacturer, is by far the largest employer in Peoria, Illinois. It pumps hundreds of millions of dollars annually into the local economy. Without Caterpillar, Peoria would be nothing, many people would move away in search of work elsewhere, and dozens if not hundreds of local businesses would shut down. Does that mean Caterpillar shouldn’t pay taxes?</p>
<p>bclintonk, While individuals volunteering for the local fire department certainly are under no notion that they get a tax exemption, the analogy is not complete. That is, the Princeton employees and students that volunteer at the fire department are not vying for a tax exemption - rather, the University that provides that source of free labor is. If the University were to pick up and move away, the fire department and ambulance service would lose a significant source of free labor, leading to them having to hire extra full-time personnel or per diem employees. This burden would be shouldered by the taxpayers. Please note that I am not arguing that this by itself justifies a tax exemption. I am simply arguing that these must enter into calculations, after you present the argument that the University uses these services, so it must pay its fair share for them. </p>
<p>It does not matter how much of the payout is actually going to FA. As long as there is a significant portion going to FA, that ensures economic diversity in the incoming class. If any significant portion of FA were reduced, that would lead to Princeton regressing to more of an upper-class privilege. And levying a massive tax on the University would definitely result in a decrease (at some level) of FA, which is against the very principles of educational equality that FA propagates. </p>
<p>It matters little to me whether Princeton likes a capital gains tax or not. I am arguing in the name of justice and fairness. If one alleges that the University makes profits, it is logical to tax its profits. It is not logical to tax its property. It’s not okay as a matter of policy to settle for something less simply because it is more convenient. The tax must be proportionate to its charge. </p>
<p>
That means that you are either earning above a modified gross income of $80,000 if filing by yourself or $160,000 if filing jointly. Obviously the government believes that if you are poorer than that standard, your possible contribution to the public good can be subsidized - if you are richer, you are simply doing your due diligence to society. The essence of a progressive tax system is everybody pays according to their ability. </p>
<p>But a comparison between yourself and the University as an institution is erroneous as a premise. That is, the specific education of one individual cannot be called a public good, even at such an esteemed institution as Princeton. That is, there is no guarantee that the result of that education will be used towards the public good. Even Ted Kaczynsky graduated from Harvard. At the individual level, education does not necessarily benefit the public good.
It’s education as an institution that is a public good. Nobody disagrees that education is bad, as a whole. That’s what institutions like Princeton contribute to. They seek to further education itself and most importantly, RESEARCH for the good of humanity (again, at the individual level, there’s no guarantee that any one individual will discover the cure for cancer or found Teach for America, but given an institution that fosters such growth, it is conceivable that the education provided by that institution will result in such results some of the time). Now, individuals contribute to individual education. That may or may not be bad. For instance, we would agree that it is bad to educate a future terrorist on how to operate airplanes. It would be bad to teach them chemistry. It would be bad to educate an espionage agent on computer science. All these things are bad at the individual level, but these risks are far reduced at the institutional level, where the sheer number of students will result in greater progress and development than in destruction (I do believe that human nature is inherently good). Institutions contribute to learning as an institution, and that is why it is a public good. </p>
<p>bluebayou, Yes, but I do not think the plaintiffs are asking to tax the profits - they are asking to tax the property. Now, in what world does that make logical sense? Either tax the profits first and then the property as a consequence of the University losing tax-exempt status, or just tax the profits. In no logical world would you tax the property but not the profits if the profits are used as the substance of the argument against tax exemption. </p>
<p>A high endowment/student is a success because the institution is able to spend more on the education of a single student. Not only via financial aid, but also via smarter classrooms, purchase of educational technology, acquisition of books, attracting faculty dedicated to undergraduate education (all faculty are required to teach here, I have not been in a single class taught by a graduate student). This holds especially true for Princeton, as it has no costly professional schools to spend that money on.</p>
<p>Like activities should be taxed alike. Private landlords with student tenants must pay property tax and income tax on rent minus expenses. Why shouldn’t universities? One argument could be that university dorms do not require the same infrastructure, such as roads and parking spaces, since few students in dorms have cars. But that is really an argument for a taxing car ownership.</p>
<p>bclintonk, interesting argument. Peoria would live on without Cat (trust me, I am intimately familiar with the area 
), but I see your point that local businesses would lose a significant part of revenue. However, Cat is a for-profit company through and through. It has never been recognized as an educational institution and therefore never been historically exempt from taxes. Princeton, on the other hand, IS, by name and practice, an educational institution and a top-notch one at that. </p>
<p>The point is, if you argue that the University puts a burden on local taxpayers by being tax-exempt (Cat does not such thing because it is not tax-exempt), you also have to take into account the fact that the University pumps millions of taxable dollars into the local economy. This could ultimately prove that the University does NOT place a substantial burden on local taxpayers. As evident by the relative affluence of the town. </p>
<p>(P.S. University tours are completely free (Orange Key). They are funded by the University.)</p>
<p>Dorms are considered by schools to be an integral part of the college experience–esp at schools like PU but also at more average schools.
Society has decided that colleges provide a desirable public benefit and are tax exempt for educational purposes. You can keep all your hot air saying otherwise.</p>
<p>
</p>
<p>Society can change its mind. Your comment is rude.</p>