Several private universities boasting multibillion-dollar endowments have engaged in substantial lobbying efforts to convince Democrats in Congress to repeal a 1.4% excise tax on private college endowments.
The leaders of several of the nation’s most prestigious private universities, including Harvard University, the University of Pennsylvania, Cornell University, and Stanford University, have lobbied Congress to repeal the excise tax, even as their endowments have ballooned due to investment returns.
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Among these efforts was a personal entreaty by Harvard President Lawrence Bacow to Senate Majority Leader Chuck Schumer (D-NY) and House Speaker Nancy Pelosi (D-CA) earlier this year seeking to have the tax repealed, the Intercept reported.
The lobbying effort came as the Ivy League university’s endowment increased by $11.3 billion in the 2020-2021 fiscal year, an increase of 33% from the previous year. Similarly, Stanford’s investments increased by 40.1% in the same fiscal year.
Despite the massive increase in their endowments, the universities have continued to push for the repeal of the 1.4% tax, which was enacted in the 2017 Tax Cuts and Jobs Act signed by then-President Donald Trump.
In a recent letter to Senate Democrats, Suzanne Day, Harvard’s senior executive director of federal relations, pushed Democratic lawmakers to include a repeal of the tax in negotiations for a social spending bill to be passed through the budget reconciliation process, which allows certain legislation to pass the Senate with a simple majority instead of the 60 votes required to overcome the legislative filibuster.
“I write to urge you to engage with Democratic Senators and allies to press for action on this in the pending FY22 reconciliation bill,” Day wrote, according to Inside Higher Ed. “We believe this is one of our best chances for improvement in this policy.”
The negotiations have centered on securing agreements from centrist Sen. Joe Manchin (D-WV), whose support is critical in the evenly divided Senate.
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Repealing the endowment tax was included in the legislative text of the “Build Back Better” bill — congressional Democrats and President Joe Biden’s first attempt at social spending legislation. Manchin’s refusal to back the legislation ended the multitrillion-dollar bill, but Schumer still intends to pass a narrower piece of legislation this year.
Harvard and Stanford did not respond to requests for comment.
