Lawmakers eye universities' tax status

The Boston Globe reports:

Rising tuition costs and growing endowments at Harvard, Yale, and other universities are drawing the ire of lawmakers who question whether the nonprofit institutions continue to deserve the tax exemptions they receive.


The Senate Finance Committee met yesterday to examine whether lawmakers should tie the endowments' tax-exempt status to lower tuition. Lower costs at elite schools would probably have a cascade effect that would bring down fees at all colleges and universities, the committee was told.

"Since tax breaks for charitable donations are supposed to contribute to the public good, it's fair to ask whether the tax breaks that lead to big university endowments are serving the public," said Senator Charles Grassley, an Iowa Republican.

The value of university endowments increased 17.7 percent last year to more than $340 billion, according to the Center for College Affordability and Productivity, a Washington research group. Tuition, meanwhile, rose an 35 percent, adjusted for inflation, since the 2001-2002 school year, according to the College Board, a New York-based nonprofit group that administers the SAT college admissions test.

We look forward to tenured Marxists defending the right to not pay taxes on giant endowments.