Massachusetts gubernatorial candidate Jay Gonzalez has touted a plan to levy an endowment tax on the state’s richest private colleges. The 1.6 percent tax would apply to schools like Harvard University, MIT, Boston College, Amherst College, and others that have endowments of more than $1 billion. In all, the tax would generate more than $1 billion a year, which Gonzalez said would pay for investments in the state’s public education and transportation systems.
The Association of Independent Colleges and Universities in Massachusetts has slammed the proposal as a “terrible idea,” arguing it would undermine “their ability to attract talent, to provide financial aid for students across the state, and to conduct breakthrough research.”
President Trump popularized the idea of the endowment tax when he proposed it as part of his tax bill. Since then, it has remained a controversial policy among both parties. Sen. Elizabeth Warren, D-Mass., initially criticized the tax as “completely backwards” when Trump proposed it, but quickly changed her tune when Gonzalez added it to his platform.
Some local Democrats have come out in full support of the plan, saying that these private institutions aren’t doing enough to help their communities. In reality, they inject millions of dollars into the local and state economy.
Gov. Charlie Baker, who opposed Trump’s endowment tax plan, has called the Gonzalez’s plan a “bad idea.” He’s right.
The endowment tax is an unfair tax. The state has no right to dip into the coffers of private universities — even the wealthiest ones. Sure, these universities will likely try to indoctrinate the next generation of young people by paying big dollars to attract leftist speakers and Che Guevara-loving professors, but that’s their right — just as conservatives should have the right to fight back with their own speakers and their own schools.
Regardless of politics, the generous supporters who have contributed to the large endowments of these universities did not donate that money thinking that their money would ultimately fund roads or bridges. Some of them donated their entire fortune to these schools when they passed away. To redirect these funds would go against the wishes of these supporters.
When you think about it, the endowment tax is no different than a death tax. It’s unfairly robbed from the legacies of many who aren’t alive to fight for it.
More importantly, this becomes a slippery slope for tax-hungry liberals. If the state taxes the endowments of nonprofit universities one day, who is to say that the state won’t want tax other nonprofits the next. Many conservative nonprofits have considerable endowments thanks to the generosity of their passionate supporters. These endowments help pay the bills, and provide stability.
Gonzalez has nothing more than a slim chance against Baker, but it’s critical that both sides continue to fight back against the notion that endowment taxes are an innovative solution. They are just another ill-conceived tax.
Brendan Pringle (@BrendanPringle) is writer from California. He is a National Journalism Center graduate and formerly served as a development officer for Young America’s Foundation at the Reagan Ranch.
