It’s no secret that the Ivy League colleges have long favored Democrats’ push for bigger government, higher taxes on the rich, and less freedom. According to a new report, however, Ivy League institutions are using government loopholes to avoid paying billions of dollars on their own taxes each year.
In a new report titled “Ivy League Inc,” the government watchdog group OpenTheBooks utilized taxpayer exemption status as non-profit educational institutions to secure “a $9.6 billion tax break on the $27.3 billion growth of their endowment funds” from 2010 to 2015.
In 2015, the combined endowments from all eight Ivy League schools totaled up to $119 billion dollars, which is enough to provide all students with a full-ride scholarship to all Ivy League universities until 2068.
Normally, this wouldn’t be an issue, as much of that endowment comes from alumni, private donations, and philanthropy. However, the report also notes that Ivy League was the recipient of $25.73 billion worth of taxpayer dollars during this during the 2011-2015 period. Most of that money went to grants and contracts for the universities, but the schools still received nearly half a billion dollars in tuition assistance payments.
In total, government payments and entitlements to the Ivy League hosed the taxpayers for $41.59 billion from 2010-2015. The report notes that this is equivalent to the government spending approximately $120,000 per undergraduate student (without accounting for any school assistance), which calculates to approximately $6.93 billion per year.
Additionally, the eight colleges of the Ivy League received more money (approximately $4.31 billion) from the federal government than sixteen U.S. states. Currently, there are more than 47 administrators at Ivy League schools with salaries of $1 million per year or greater, and two executives were each paid $20 million between 2011 and 2014.
In 2016, more than 94 percent of political donations from Ivy League employees went to Democrat politicians.
President Trump has taken notice of the insane tax loopholes universities use, and pledged to reform them in a manner that would force universities to prioritize lowering student costs.
“What a lot of people don’t know is that universities get massive tax breaks for their massive endowments,” said Trump at a campaign rally before the election. “These huge, multi-billion-dollar endowments are tax-free, but too many of these universities don’t use the money to help with the tuition and student debt.”
Representative Tom Reed (R-GA) has also made it a priority to reform the tax loophole system used by universities. Under his Reducing Excessive Debt and Unfair Costs of Education (REDUCE) act, universities with endowments of larger than $1 billion dollars would be required to spend a portion of profits earned on tuition relief for students, or face penalty taxes if they fail to do so.
