The Left's War On Christians
See other The Left's War On Christians Articles
Title: "Don’t Stop with Harvard"
Source:
National Review
URL Source: https://www.nationalreview.com/2025/05/dont-stop-with-harvard/
Published: May 27, 2025
Author: John Fund & David M. Simon
Post Date: 2025-05-27 11:04:55 by Mudboy Slim
Keywords: None
Views: 170
Comments: 3
"What if we abolished all tax exemptions for nonprofits?" The fight between President Trump and Harvard University keeps escalating. On Friday, a federal judge blocked Trump’s new ban on Harvard enrolling foreign students, pending further legal action. Trump has already moved to strip Harvard University of its exemption from federal taxes based on claims that the university violates current civil rights laws. But the bigger and broader public policy debate is over why this country should have federal, state, and local tax exemptions for any nonprofits. At the federal level, the problem is simple but egregious. Harvard and other private universities pay little or no tax on billions of dollars of investment gains on their giant endowments. The Big Ten and other college athletic conferences avoid taxes on hundreds of millions of dollars of football, basketball, and other college-sports income. Vast numbers of other rich nonprofits — including institutions such as the Gates Foundation with its endowment of over $75 billion, trade associations, hospitals, and churches — similarly benefit. In the case of universities, favorable tax treatment extends to their employees. University professors and staff pay no federal income tax on university-provided housing — including multimillion-dollar off-campus homes and apartments — and private-school and college-tuition stipends for their children. By substantially narrowing the tax base, these tax exemptions raise taxes on the rest of us. The problem at the state and local levels is worse. In addition to similarly shrinking the tax base and raising real estate taxes as well as income taxes, tax exemptions for nonprofits distort the real estate market. By making real estate ownership tax-free for nonprofits — and thus less expensive than for homeowners and businesses — these exemptions lead universities, hospitals, foundations, churches, and other nonprofits to buy, build, and own more gleaming skyscrapers, football stadiums, and cathedrals. This reduces the supply and raises the price that the rest of us pay to buy and own real estate. The purported justification for this system is that abolishing it would eliminate the tax deduction for charitable contributions and supposedly shrink contributions. But decades of data strongly suggest otherwise. In 1954, the top federal income tax rate was 91 percent. Legislation in the 1960s, the 1980s, and 1990 reduced it to 31 percent by 1991. If tax exemptions were critical to charitable contributions, the reduction of two-thirds of the federal income tax benefit for charitable contributions should have reduced contributions. But it did not. During this period, as this chart vividly shows, both total and per- capita charitable contributions sharply increased, even after adjusting for inflation. As the same chart shows, after 2001 legislation reduced the top rate (starting in 2003) from 39.6 percent to 35 percent, charitable contributions again increased rather than decreased. In 2017, in addition to reducing the top rate (including the 3.8 percent net-investment income tax) from 43.4 percent to 40.8 percent, legislation also substantially increased the standard deduction. Yet since this legislation, as the share of taxpayers who itemize their deductions and benefit from deducting charitable contributions declined from 31 percent to 9 percent, charitable contributions nevertheless increased rather than decreased. Data compiled by the Philanthropy Roundtable and National Philanthropic Trust show that Americans have steadily increased their charitable contributions, from $54 billion in 1954 (in 2016 dollars) to $390 billion in 2016, and then to $557.1 billion in 2023. The real debate shouldn’t be over whether Harvard should keep its tax exemption. The real discussion should be about whether we should move to abolish all federal, state, and local tax exemptions for nonprofits — thus allowing us to cut taxes for all of us, without hurting charitable contributions.
(Philanthropy Roundtable)
Post Comment Private Reply Ignore Thread
Top • Page Up • Full Thread • Page Down • Bottom/Latest
#1. To: All (#0)
Regards...MUD "NOW...Devolve Power Outta the Federal Leviathan!!"
Defund the Deep State...MUD "NOW...Devolve Power Outta the Federal Leviathan!!"
F*** Harvard...MUD "NOW...Devolve Power Outta the Federal Leviathan!!"
#2. To: All (#1)
#3. To: All (#2)
Top • Page Up • Full Thread • Page Down • Bottom/Latest
[Home] [Headlines] [Latest Articles] [Latest Comments] [Post] [Mail] [Sign-in] [Setup] [Help] [Register]