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Goring The Sacred Cows

Ah, Massachusetts. If there's one thing that can be depended on, it's that the Boston Globe and the state legislature will agree on one thing -- no matter what the problem is, it can be solved by raising taxes and taking more money from the subjects of the Commonwealth and placing it in the hands of the elected government. And anything can be taxed -- it's like they took the Beatles' "Taxman" as an instruction manual:

f you drive a car, I'll tax the street If you try to sit, I'll tax your seat If you get too cold, I'll tax the heat If you take a walk, I'll tax your feet

Well, the unthinkable has happened. The legislature is looking into a new source of tax money, and the Glob does NOT like it one darned bit:

They want to go after private college endowments.

The proposal is simple, even seductively so: if a private college or university's endowment is over $1 billion dollars, then the state takes a cut of it -- 2.5% a year. For Harvard, the example cited, their endowment is $34 billion, so they'd be on the hook to the state for $850 million a year.

Now, the Boston Globe's arguments are fairly solid. For all my attacks on the Bay State, it is, indeed, a Mecca of higher education. And those schools do draw a lot of people -- and money -- to the state.

But on the other hand, that sort of thing is a long-term investment. Massachusetts has a short-term money crunch, and the government there is constitutionally incapable of cutting spending or doing anything else to fix the problem short of raising taxes. And it's not like these schools are going to up and move out of state -- they're not like private businesses; they have far too much invested in real estate, not to mention traditions.

But the whole matter brings up a question that has been bothering me for some time about college and money: why have the costs of a college education been rising so damned much, well in excess of the inflation rate?

Well, a year at Harvard runs, currently, about $47,000. That went up about 3.4% over the last year. And I strongly suspect that that is probably below the average for most colleges over the last decade or two.

And Harvard is sitting on 34 BILLION dollars.

So, by the standards applied to other private entities (like for-profit corporations), they are extremely wealthy, and a great deal of their income and assets are tax-free. In other words, they are subsidized by the public.

Personally, I think that the state of Massachusetts already collects too much money from its residents (I can't call them "citizens," and "subjects" is just a little too harsh), and the representatives should learn to simply control themselves and cut back. But that's not gonna happen, so I have no problem with them looking at this fresh new source of money.

Especially since it's usually a bastion of those who call for raising taxes and fees and whatnot from everything else but themselves.

Blue on blue infighting, in the bluest of the blue states.

It's a beautiful thing.


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Comments (6)

This proposal is daft even ... (Below threshold)

This proposal is daft even by MA standards.

Kujowski is an idiot, even by MA standards. His amendment is a take-off from a bill filed by Alice Wolf, another daft moonbat from Cambridge, which proposed to eliminate the real estate tax exemption enjoyed by Harvard and MIT, and use the revcenue to subsidize the property taxes of everyone else in the city. Her bill was sent to the graveyard a study, where it will now be joined by this silly nonsense.

I think they should tax end... (Below threshold)
GianiD:

I think they should tax endowments at least the same amount as the cap gains rate.

'They' always want to tax the rich, well, 34 bil def. qualifies as 'rich'.

First, Massachusetts is not... (Below threshold)
galoob:

First, Massachusetts is not a particularly high-tax state, according to the Tax Foundation they are ranked 28th in state and local tax burden.

Tax Foundation state tax rankings

Not all states are mostly empty and can make their money off of tolls, liquor, speeding tickets and the federal government.

Second, Harvard's endowment was $10 billion ten years ago - so they've tripled it. They own oil wells and lots of rental property.

The problem is that large rich universities in cities go on real estate buying sprees which take taxable property off the market. They and their students demand services and cause others to demand services (like the neighbors who have to call police for keg parties).

Anything that takes money o... (Below threshold)
retired military:

Anything that takes money out of this liberal institution is fine by me.

How much money do we taxpay... (Below threshold)
pa:

How much money do we taxpayers (state and federal) give to Harvard and other big universities in the form of grants, research programs, and other kinds of financial support? I bet Harvard gets more than $850 million a year from taxpayers. I wouldn't mind skipping taxes on their endowment if we could eliminate taxpayer money being sent to them instead.

galoob,Your ... (Below threshold)
corwin:


galoob,
Your credibility with me is zero.If there was a negative cred,you'd get it.NO ONE in the universe believes an endowment the size of Haarvard's triples in a couple of years.The statement screams,"I know nothing about the subject,"Please grovel abjectly.




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