Letter to Congressperson Elise Stefanik
November 6, 2017
I write to oppose the House of Representatives including a new tax on private college and university endowments in its tax bill.
Please reject this new tax on private colleges. This is an unfair penalty levied on a specific sector of higher education that cares deeply about maintaining the highest quality of education, while managing costs amid increased regulation and outside pressure. The proposed tax will divert resources from our students, and add to the complexity of the tax code when the goal is simplification.
Colleges work extremely hard to keep costs contained for our students; an important source of revenue for our educational mission is the philanthropy of our alumni, parents, friends, foundations and others. Taxing endowments is taking money that private citizens donated for charitable purposes, and that were identified by the IRS as worthy public causes. This new tax will not only affect colleges with large endowments, but also smaller institutions that serve students in more personal settings. I believe this proposal is unethical at best.
Furthermore, this penalty will put private colleges at a competitive disadvantage with public colleges that we compete with directly in the marketplace. Private college endowments serve the same function for our institutions as the full faith and credit of the states serve the public colleges—namely to stabilize our institutions during challenging times, and to ensure we can serve our mission.
Taxing endowments of private, nonprofit colleges and universities will have a significant negative impact on our institutions and the students we serve for the public good, a public good that also includes economic vitality in regions like St. Lawrence County where the colleges are among the largest, if not the largest, employers of the citizens.
William L. Fox