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University President Drew G. Faust joined 48 other higher education leaders in penning a letter to congressional leaders Wednesday to express “deep objections” to the new federal tax on endowment returns and to ask Congress to “repeal or amend the tax.”
The letter, which includes signatures from every Ivy League university president except for Columbia’s—which does not currently qualify for this tax—specifically addresses the schools’ concerns about the tax’s potential to limit financial aid resources.
“[The tax] will constrain the resources available to the very institutions that lead the nation in reducing, if not eliminating, the costs for low- and middle-income students, and will impede the efforts of other institutions striving to grow their endowments for this very purpose,” the letter reads.
The 1.4 percent tax on endowment returns, a provision of the Republican-endorsed Tax Cuts and Jobs Act passed in December, applies to institutions of higher education whose endowment values amount to at least $500,000 per student. Harvard would have paid $43 million if the endowment tax were in effect for fiscal year 2017, according to an estimate offered by University Provost Alan M. Garber in November.
The letter concluded by urging congressional leaders, including Senate Majority Leader Mitch McConnell and Senate Minority Leader Charles Schumer, to revisit what the document's authors called a “misguided” tax policy.
In the past, Faust has repeatedly denounced the tax and its expected impact on Harvard.
“What [the endowment tax] will do is put constraints on our ability to fund the variety of undertakings that are central to our mission—financial aid and research, public programs, the variety of endeavors across the University," Faust said in an interview in January. “Its ultimate impact will be on limiting the growth in the endowment, and the growth in the endowment is what funds the programs.”
—Staff writer Jamie D. Halper can be reached at firstname.lastname@example.org. Follow her on Twitter @jamiedhalper.
—Staff writer William L. Wang can be reached at email@example.com. Follow him on Twitter @wlwang20.
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