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"due largely to the heavy new 8% tax on our endowment returns, a burden for MIT and only a few other peer schools" I went digging. Turns out that's a 2025 "Big
by simonw 6mo ago
"due largely to the heavy new 8% tax on our endowment returns, a burden for MIT and only a few other peer schools"
I went digging. Turns out that's a 2025 "Big Beautiful Bill" thing, which raised that from 1.4% to 8% but only for colleges where the endowment exceeds $2,000,000 per student. Which meant MIT, Stanford, Princeton, Yale, Harvard.
https://waysandmeans.house.gov/2025/05/14/ways-and-means-votes-to-make-2017-tax-cuts-permanent-provide-additional-relief-for-workers-reward-investment-in-america-and-hold-woke-elites-accountable/ https://waysandmeans.house.gov/2025/05/14/ways-and-means-vot... boasts that this "Holds woke, elite universities that operate more like major corporations and other tax-exempt entities accountable".
- IncreasePosts 6mo agoWow. If they think 8% is heavy they should see how much in taxes their janitors are paying
- simonw 6mo agoPresumably 0% on their 401k returns, which is the more appropriate comparison point to an endowment.
- spyckie2 6mo agoRespectfully, comparing a janitor's 401k to a $27.4 billion endowment is (very) tone deaf. But yes, the tax goes against "keeping sacred systems sacred" principles and is an opinionated policy against rich entities that the current administration dislikes.
- simonw 6mo agoYes, it's tone deaf. And comparing tax on an endowment to "tax a janitor pays" is arguing in bad faith.
- JuniperMesos 6mo agoUS federal government taxation policy shouldn't treat university endowments as sacred systems.
- simonw 6mo agoAnd it shouldn't treat them as levers to exact vengeance either.