Thursday, December 13, 2007

Sober thinking on the effect of huge education endowments

In thisOpinionJournal item, "Harvard for Free", former Major League Baseball Commissioner Fay Vincent reflects upon the impact that the enormous endowments at Harvard, Yale and other elite schools will have upon university governance and tuition in the future. We could be at the edge of some very major changes in higher education.

Once again, remind me why this deserves to be a tax-free enterprise?


Anonymous said...

It should be tax free because it's a public good supplied by nonprofit organizations. The schools should, however, use a certain substantial portion of their endowments to keep down tuition for all students and assist low- and middle-income ones more.

Jim Gust said...

But are there no limits on this tax-free privilege? Harvard and Yale already have endowments large enough to stop charging tuition altogether. I am suggesting that when endowment income reaches a certain extraordinary level--perhaps $10 million per year?--that investment income should be subject to income tax, just as my own dramatically smaller investment income is taxed.

On the other hand, I am part owner of a small business that provides a public good also--jobs. Could we make my business enterprise tax-free also?