We believe that intent matters. Just because Harvard students have been provided with a lucrative education doesn’t mean that we are entitled to it. Democratic gubernatorial nominee Jay Gonzalez has outlined a tax on large private university endowments that would serve to fund public education at the K-12 and public higher education levels, as well as public transportation. If Harvard were truly committed to educational equity, it would be supportive of redistributive policies that would increase access to quality education for all students — not just those privileged enough to attend this institution.
We recognize that endowment taxes could be viewed as an attack on institutions of higher learning, especially considering that just earlier this year the taxes were used by Republicans to pay for tax cuts for the wealthy. However, we believe that an endowment tax levied by the state could be the first step towards ensuring educational success for Massachusetts residents at large. As an institution that boasts one of the largest endowments in the world, Harvard must begin to analyze the role it has played in exacerbating inequality in the greater Cambridge area and be critical about the ways in which it has financially benefited from their tax exemptions as a “non-profit.”
Indeed, Harvard takes in a tremendous amount of money each year. With the cost of undergraduate tuition costing approximately $67,580, Harvard must receive millions every year in fees from its undergraduate and graduate students. Though Harvard’s generous financial aid program does much to alleviate this tuition burden from its most disadvantaged students — 55 percent of undergraduates receive need-based scholarships — this does not change the fact that the remaining 45 percent of the class pays tuition in full.
To add to that sum, Harvard receives billions of dollars in donations from wealthy alumni. In 2014, the Harvard School of Public Health received a donation of $350 million, and was renamed the T.H. Chan School of Public Health. The list goes on: John A. Paulson donated $400 million to the School of Engineering in 2015; India’s Tata Group — which is closely affiliated with Harvard Business School alumnus Ratan N. Tata — donated $50 million to the Business School in 2010. This tremendous volume of money will certainly survive being taxed, allowing more than enough to remain to fund financial aid and research initiatives. Thus, for the sake of keeping the wealth of institutions of higher education in check, Harvard’s endowment should be taxed.
Harvard has avoided paying certain taxes for years because of its label as a non-profit, but it’s undeniable that its presence in Cambridge has had negative effects on surrounding communities. Harvard has been guilty of gentrification. This includes not only the over 600 acres of land that the University owns, but also the amount of property that has been bought out or rented by wealthy Harvard affiliates who reside in the surrounding communities. As a result, Harvard’s expansion has diminished the amount of low-income people of color who live in the area.
Additionally, Harvard has been afforded mass tax exemptions that have negatively affected local economies. While the University participates in a “payment in lieu of taxes” program, there are few structures set in place to ensure accountability or that payments reflect the full extent of Harvard’s financial gain. In the past, Cambridge city officials have been critical about the University’s failure to meet PILOT requests and the impact that not paying property taxes has had on the city.
Harvard recently surpassed the fundraising goal set in its capital campaign by over $3 billion. An endowment tax would only cost the University a sixth of this, barely making a dent in Harvard’s budget. It would seem to have little effect on Harvard, but could mean great improvements for the larger community. We believe the tax on Harvard’s endowment could be put to use by giving money back to the community that Harvard has been taking from for centuries. Keeping all these considerations in mind, we agree with Gonzalez’s point that it’s time for Harvard to start paying its fair share. This is not something Harvard would be doing as a charitable act — the institution has the moral obligation to comply with an endowment tax after taking so much for its own self-interests that have been disguised as noble in the name of education.
Laura S. Veira-Ramírez ’20, a Crimson Editorial editor, is a History and Literature concentrator in Leverett House. Diego Navarrete ’21, a Crimson Editorial editor, lives in Pforzheimer House. Emily A. Romero ’21, a Crimson Editorial editor, lives in Cabot House.
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