If you followed politics over the weekend, you may have for the first time heard of Hillsdale College on Friday night. Democratic Senators, led by Chuck Schumer and Jeff Merkley, went to the Senator floor and slandered the small Michigan College, lying about it in the most vicious ways.
Others can debunk the lies about Hillsdale — and if a columnist spent his columns showing senators to be liars, he would have time for little else.
What I'd rather explore here is what spurred Schumer, Merkley, and friends to launch their attack on a small liberal arts college in Middle of Nowhere, Michigan, and what the episode tells us about liberals, conservatives, the government, and the institutions that stand between the central state and the singular individual.
The story begins with a tax hike in the Republican tax bill. The Senate bill, in its version early last week, included a provision imposing a small tax on the largest college endowments, hitting any endowment larger than $250,000 per student at any school with more than 500 students.
Before the bill hit the floor, Republicans made two tweaks to the endowment tax: First, they increased the threshold to $500,000 per student. Second, adopting a proposal from Sen. Pat Toomey, R-Pa., they exempted colleges that don’t accept federal financial aid for students, also known as Title IV funds.
A handful of colleges refuse federal funds because they come with strings attached. Wyoming Catholic College, for instance, began rejecting federal funds after the Obama administration issued new, avant-garde interpretations of Title IX (which bars sex discrimination on campus) and heightened its policing of its “anti-discrimination” rules. It’s questionable whether a school accepting Title IV funds could completely adhere to Catholic teaching on marriage and sexuality, for instance.
Hillsdale prides itself on its rejection of racial discrimination, having first admitted black students in the 1840s, about 100 years before Princeton, where Jeff Merkley got his Master's Degree, graduated its first black student.
With that history, Hillsdale was not about to start discriminating on race in order to meet federal affirmative action standards. In the 1960s, the school declared it wouldn’t accept federal funds.
Just as Planned Parenthood sees fundraising bonanzas when Republicans crimp the flow of federal funds to that abortion giant, Hillsdale’s anti-Title IV stance has won it many generous conservative donors. The result is a large endowment — about $325,000 per student, on par with Brown University, and half that of Wellesley College.
Raising the endowment-tax threshold to $500,000 per student exempted Hillsdale, for now. The other abstainers, like Grove City and Wyoming Catholic, are below even the $250,000 threshold. Toomey's amendment would provide a more permanent exemption for those schools with 500-plus students that reject Title IV money — of which Hillsdale has the largest endowment.
This is what brought on the firestorm from the likes of Schumer and Merkley. The Senate pulled Toomey’s exemption from the bill, and so the final bill included the tax, on both Princeton and Hillsdale, along with a few dozen others.
Toomey’s amendment was a mistake, and I say that as a lover of Hillsdale. I have a professional and personal relationship with Hillsdale. My first roommate in D.C. was a Hillsdale alumnus. I have had many Hillsdale alumni work under me and alongside me. I spent two weeks at Hillsdale in 2012 as a visiting professor in journalism (they paid me). I was so impressed with the students and the atmosphere that were I to choose a non-Catholic college for my children to attend, it would probably be Hillsdale.
But looking at Toomey’s amendment is looking in the wrong place.
The whole undertaking was a mistake. Here’s a good rule for policymakers: Any time you find yourself tacking an exemption onto a new tax or regulation — a small-business exemption, a religious exemption, a not-federally-funded exemption — that’s a good sign your proposed tax or regulation is unwise and destructive.
Republicans shouldn’t tax endowments. They shouldn’t use tax law to target the other side’s institutions, because a war between the Leviathan State and the institutions of civil society is a war that conservatives automatically lose.
It’s surprising when you consider it, but the Left’s politicians have been fairly hesitant to sic the taxman on our institutions. (Lois Lerner’s attack on Tea Party groups was as noteworthy as it was because it was so exceptional.)
The culture warriors on that side want to tax churches more, to blow up our charities, and to come after our religious schools. They’ve attacked our institutions in many ways, but as Wyoming Catholic and Hillsdale’s moves have shown, there’s generally been a safe harbor (in some regards).
Preserving those safe harbors, that sphere of liberty for our institutions, is the single most important fight for conservatives today. We ought to be using this fleeting period of Republican governance to strengthen the walls around civil society, not to heighten the war between the state and civil society.
Weaponizing the tax code against the Left's preferred middle institutions is a mistake. Their institutions have more money and can last longer than ours, and the Left will always be more ruthless in their use of big government. And to chip away at the middle institutions — whether they be Harvard or Hillsdale, colleges or churches — is the most unconservative thing one can do with government power.
If we don’t want Democrats coming after our churches, we shouldn’t go after theirs. The only institution of the Left’s we should be attacking is big government.
If it’s our civil society institutions against theirs, we can win, because all we need in order to win is to live our lives and raise our families as we believe to be best. We win if there is cultural peace.
Toomey’s amendment highlights just how precarious the Right becomes once the taxman is empowered to crush institutions. If you are about to unleash a weapon that requires a special shield to avoid harming your own encampments, maybe don’t unleash that weapon, because the other side could pierce the shield.
There is a logic behind an endowment tax, and also a logic behind Toomey’s amendment. Hillsdale uses its endowment for the same function (aid for needy students) for which Harvard uses taxpayers' money, why tax Hillsdale’s endowment when you don’t tax Harvard’s federal cash?
Similarly, if you see the world like a tax collector, it makes sense to tax college endowments. But seeing the world like a tax collector is antithetical to cultural health. A tax collector would tax the churches. A tax collector would tax stay-at-home moms. A tax collector hates anything being beyond its rapacious reach, and churches and universities are the biggest quarries out there.
The ideal for the tax collector is that we would have only profit-seeking corporations (taxed on profits) and individuals (taxed on income). Anything else — education, welfare, arts — would be the purview of the state.
America’s strength is, and has always been, its middle institutions. To preserve cultural peace, and thus to strengthen the safe harbor of our side’s institutions, the Right should back off their war on the Left’s institutions of civil society. Leave Harvard alone.