Ivy League Endowments Don’t Want to be Taxed as they Sit on Tens of Billions
Posted on 08/29/2020
The White House’s Office of Information and Regulatory Affairs is examining the endowment tax.
The endowment tax is a 1.4% excise levy on the net investment income of high-endowment private colleges and universities,which include
Yale University,
Harvard University,
Stanford University,
and other private colleges.Many of these ivy league endowments pay extravagant salaries to their buyside teams.
For example in 2017,
Harvard University
paid its top 6 endowment officials US$ 40.5 million total.
Harvard estimates an excise tax bill of nearly US$ 50 million for 2019.According to Harvard,
the total 2020-2021 cost of attending Harvard College without financial aid is US$ 49,653 for tuition and US$ 72,391 for tuition, room, board, and fees combined.The ivy leagues are complaining that the 1.4% excise tax will hurt financial aid.
Stanford University ：
estimates a tax bill of US$ 42.9 million.
Stanford has an endowment from 2019 figures of US$ 27.7 billion.
The levy tax：
was part of the Tax Cuts and Jobs Act of 2017, which was a measure to make sure that other entities paid their fair share in taxes.
SWFI estimates：
the tax will have little to zero impact on large endowment’s investment strategies.