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University President Drew G. Faust will meet with two members of Congress this week to discuss a proposed bipartisan repeal of the endowment tax passed in December.
The endowment tax passed last December would require private colleges and universities with endowments greater than $500,000 per student to pay a 1.4 percent excise tax on endowment gains. Harvard—among the 35 institutions affected by the tax— would have paid nearly $43 million if the tax were in effect in 2017.
Faust will meet with Alabama Republican Congressman Bradley Byrne and Maryland Democratic Congressman John Delaney, who jointly proposed a bill last month seeking to repeal the tax. The bipartisan bill is also garnering support from a higher education lobbying contingency that includes Yale University, according to Bloomberg News.
In a statement Tuesday, Faust wrote that 36 percent of Harvard’s annual budget is dependent on endowment income, including the College’s financial aid program, which allows students from families earning less than $65,000 to attend the college tuition-free. Faust wrote that she will be “encouraging elected officials to undo this damaging and unprecedented tax” this week.
“Endowments are a crucial way in which colleges and universities fund financial aid that expands affordability and access, groundbreaking research that leads to cures and scientific discovery, and campus development projects that create jobs and economic growth locally, among other things,” she wrote.
In February, business experts said the effect of the endowment tax will remain unclear until the Internal Revenue Service irons out the the details of the law, like how to measure endowment assets or define endowment gains.
Faust has repeatedly criticized the endowment tax in recent months. When Congressional Republicans passed the law in December, Faust wrote that she was “deeply concerned” about the “unprecedented” tax. Faust said in a February interview the bill would have a “pretty significant” impact on the University’s endeavors.
In March, Faust wrote a letter with 48 other higher education leaders expressing “deep objections” to the endowment tax and urging leaders in Congress to “repeal or amend” the tax.
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