Jessica Blake at Inside Higher Ed:
House Republicans on the Ways and Means Committee released the full version of a long-awaited tax bill Monday that does for higher ed exactly what they suggested it would in a draft version Friday: dramatically increase the excise tax on wealthy colleges’ endowments.
If the legislation passes, the tax rate for each institution would range from 1.4 to 21 percent, depending on the size of its endowment and the number of students it enrolls, according to the 339-page bill. As with the existing endowment tax, the increases would apply only to private institutions.
“Under the economic policies of President Biden and Washington Democrats, the wealthy and well-connected benefitted from taxpayer handouts,” said committee chairman Jason Smith, a Republican from Missouri. “The Ways and Means Republican tax bill ends special interest giveaways and will hold the woke elite and entities that benefit from the tax code accountable.”
But higher education lobbyists said the excise tax will be incredibly detrimental to the sector.
“It essentially takes bad policy and makes it worse,” said Steven Bloom, assistant vice president of government relations for the American Council on Education. “Almost 50 percent of endowment spending is on financial aid … This money is going to come right out of that. It’s just really unfortunate.”