Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Is It Time to Tax Harvard’s Endowment?

slate.com

Post reply on HN
Print view View original

21–30 of 96 posts

Re: Is It Time to Tax Harvard’s Endowment?

#21

Post by vilhelm_s »

nemothekid wrote: post #7
dalke wrote: post #4

Earlier quoted context omitted.

What would "meat" look like to you? Suppose you were to start "a hedge fund with a university attached to it", in order to use the university's non-profit status to minimize paying taxes. What would that look like? Would you set up need blind admission, in order to provide better cover to justify the hedge fund? The article points out that the non-profit status means that "Princeton received $105,000 in tax benefits…

I'm not sure what your point is. Let's say the above were true, a non profit organization uses its tax subsidies to let students attend for free - how is that not a good thing? And how is that not something that should be encouraged?

We should compare to how much good the same money would do if it was taxed instead of left to Harvard? E.g. the German state pays $32,000 per student and degree, so foresaking $400,000 of taxes in order to educate one student seems like a bad deal.

Re: Is It Time to Tax Harvard’s Endowment?

#22

Post by JoshTriplett »

mikeash wrote: post #6
mhb wrote: post #5

It is disturbing that the author so lightly morphs a tax exemption into a taxpayer subsidy. As if the natural state of things is for the government to tax everything and whatever it doesn't is being subsidized.

What's the difference between giving you $X that other people don't get, and asking you to pay $X less in taxes that other people have to pay?

What's the difference between me giving you $X and me ever so generously not taking $X from your bank account?

Also note the phrase "non-profit". This isn't a benefit we give to everyone; you have to have a registered non-profit that works towards some charitable cause (such as, in this case, giving people a free or low-cost education). If you want to argue that non-profit organizations should not exist, or argue for more constraints on the definition of public benefit, feel free; the article likely didn't because that would garner a lot less sympathy than disingenuously equating non-profits to picking the government's pocket at the expense of taxpayers.

Now, that said, I do have a fair bit of sympathy for the idea of limiting the granting of non-profit status, as well as many tax deductions, but only in conjunction with drastically reducing taxes for everyone. Non-profit status and tax deductions would matter a lot less if everyone paid an order of magnitude less in taxes across the board, and then we could eliminate the administrative overhead of tracking all of those things.

Re: Is It Time to Tax Harvard’s Endowment?

#23

Post by chrisBob »

bradleyjg wrote: post #8
chrisBob wrote: post #2

People give these elite colleges and universities a hard time, but I think it is mostly sensational stories with no meat. Do you know how many US schools are need blind and meet full need for all students? 6. [1] I also have no clue where the story about these schools being for rich kids came from. When my wife went to Princeton a few years back it was one of the cheapest options for her! Schools all base need on the…

Harvard waives fees altogether for families making less than $65,000. More than 60% of US households have income less than that+, yet only 20% of Harvard's undergraduate class pays no fees. From this we reasonably say that Harvard is mostly a school for rich kids, despite its generosity to those non-rich kids it lets in. In this way it is similar to elite private high schools in NYC or boarding schools in New England…

>yet only 20% of Harvard's undergraduate class pays no fees

Unfortunately I think this is mostly an issue of exposure. It is probably harder for most Andover Academy students to get into an Ivy than it would be for a similar student from a rural school, but most rural students don't know that. If the guidance counselors at high schools educated their students about their options many more of them would likely apply to top tier schools.

Re: Is It Time to Tax Harvard’s Endowment?

#24

Post by kailuowang »

hackuser wrote: post #14
mhb wrote: post #5

It is disturbing that the author so lightly morphs a tax exemption into a taxpayer subsidy. As if the natural state of things is for the government to tax everything and whatever it doesn't is being subsidized.

> As if the natural state of things is for the government to tax everything and whatever it doesn't is being subsidized. Why shouldn't everyone pay their share? If I'm paying my share and you aren't paying yours, I'm subsidizing your government services.

Not the same thing here. The rich people already pay their share in tax that supports public education that they don't benefit from. The people who go to public education don't pay anything more.

Now the author is arguing that the rich people needs to pay more tax because they pay for their own education by going to a private school? That doesn't make sense to me.

Re: Is It Time to Tax Harvard’s Endowment?

#25

Post by jhugg »

kailuowang wrote: post #17

When public education needs more money, taxing private education to support them doesn't help education in the society as a whole. High education should not be taxed, period. It's investment towards more tax income in 3-4 years. If you need to tax something to support some providers of education, it's not other providers of eduction.

One issue here is using tax policy to incentivize investment in higher education by penalizing institutions for NOT spending huge endowment windfalls on higher ed.

You don’t tax Harvard the school like you tax a corporation. You tax Harvard the fund, if and only if it’s not existing primarily to support Harvard the school.

Sitting on money doesn’t help the economy much.

Re: Is It Time to Tax Harvard’s Endowment?

#26

Post by chrisBob »

mhb wrote: post #5

It is disturbing that the author so lightly morphs a tax exemption into a taxpayer subsidy. As if the natural state of things is for the government to tax everything and whatever it doesn't is being subsidized.

Furthermore they focus on per student numbers when a lot of the work done at private universities is graduate education and research work. Comparing based solely on the tax advantage / # of undergrads doesn't capture the difference in what the schools do.

Re: Is It Time to Tax Harvard’s Endowment?

#27

Post by adminprof »

chrisBob wrote: post #2

People give these elite colleges and universities a hard time, but I think it is mostly sensational stories with no meat. Do you know how many US schools are need blind and meet full need for all students? 6. [1] I also have no clue where the story about these schools being for rich kids came from. When my wife went to Princeton a few years back it was one of the cheapest options for her! Schools all base need on the…

The number 6 you mention is schools that are need blind and meet full need for both US and International Students.

Most well-known universities are need blind and meet full need for US students, and partially support international students. Which I think makes perfect sense.

Re: Is It Time to Tax Harvard’s Endowment?

#28

Post by mikeash »

JoshTriplett wrote: post #22
mikeash wrote: post #6

Earlier quoted context omitted.

What's the difference between giving you $X that other people don't get, and asking you to pay $X less in taxes that other people have to pay?

What's the difference between me giving you $X and me ever so generously not taking $X from your bank account? Also note the phrase "non-profit". This isn't a benefit we give to everyone; you have to have a registered non-profit that works towards some charitable cause (such as, in this case, giving people a free or low-cost education). If you want to argue that non-profit organizations should not exist, or argue for…

The difference between your two scenarios is that in one scenario I have $X more than in the other scenario.

In my two scenarios, the money you have at the end is the same for both.

As for "If you want to argue," I'm not arguing anything. I'm asking what the difference is between a direct subsidy and a tax exemption, as the comment I replied to is complaining about the author conflating the two.

Re: Is It Time to Tax Harvard’s Endowment?

#29

Post by Quanticles »

1. If you're going to tax universities, then you need to tax churches too. Good luck.

2. If you're going to tax non-profits, then why have non-profits?

3. Do we really want to penalize fiscally responsible organizations when even governments are going bankrupt? What values are we trying to support here?

Re: Is It Time to Tax Harvard’s Endowment?

#30

Post by guelo »

rubidium wrote: post #11
mhb wrote: post #5

It is disturbing that the author so lightly morphs a tax exemption into a taxpayer subsidy. As if the natural state of things is for the government to tax everything and whatever it doesn't is being subsidized.

No kidding. "And since bestowing tax exemptions is the same as spending cash from the government’s perspective". I physically shuddered as I read that. The authors entire argument falls apart right there.

An accounting truism made you shudder?
Post reply on HN