One tax reform proposal -- which officials of Harvard and other universities feared might cripple universities' fund raising efforts -- appears to have died in Washington.
Under the proposal, the tax deduction on gifts of stocks and other valuable property to a charitable institution (such as a university) would have been limited to the original cost of the property, rather than to its current market value, as is now the case.
The House Ways and Means committee had informally discussed the proposal as a potential part of the tax reform package which the committee is now preparing. The committee is reported, however, to have changed its mind about including this provision in the tax reform package.
The proposal had been strongly opposed by universities, for whom stocks and other properties are an important source of endowment. Harvard, for example, usually receives about $4 to $5 million a year in such donations, and in 1967-68 an exceptionally large gift boosted the total to $16 million.
The change of the committee's position on the proposal became known last Wednesday--the same day that representatives of 15 Massachusetts colleges, including one high-level Harvard official, went to Washington to voice their opposition to the proposal.
While in Washington, the delegation met with Massachusett's members of the House of Representatives, and with members of the Senate Finance Committee.
"We emphasized that [the proposal] would have very detrimental effects on gifts to institutions at a time when they could ill afford it," commented the Harvard representative, Eugene G. Kraetzer Jr '29, assistant to the secretary to the Corporation.
His personal opinion, Kraetzer said, was that the proposal was "not a reform anyway, but rather a major change of policy" from the past practice of encouraging contributions to charitable institutions to a new--and dangerous--one of discouraging such contributions.
"I think they've about made up their minds that this is not a proper way to attack this tax reform problem," he said. "I would say that we were much happier with the situation at the moment than we thought we'd be a few months ago."