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Should endowments be taxed ?

prezomarprezomar Registered User Posts: 186 Junior Member
edited May 2009 in Prep School Admissions
Just wondering what you guys think ...
Post edited by prezomar on

Replies to: Should endowments be taxed ?

  • MuastotMuastot Registered User Posts: 63 Junior Member
    Of course they shouldn't. Schools are non for profit organizations so the government shouldn't take away necessary funds.
  • BostonDad2BostonDad2 Registered User Posts: 27 New Member
    School endowments are getting a free ride when compared to foundations. I believe that schools should follow the same tax rules that foundations do. Foundations are not taxed unless they don't fund programs at a specified level (minimum percent payouts).

    Not being taxed is a form of public subsidy and unless the organizations that control these funds clearly act in the public interest there is every reason to be taxed just like every other institution in the U.S.
  • BaltoBalto Registered User Posts: 63 Junior Member
    Unless I am missing something, schools do follow the same payout requirements as foundations. Bostondad2, what specifically are you referring to?
  • Padre13Padre13 Registered User Posts: 294 Junior Member
    I'm not sure about prep schools, but there is an exemption for colleges. The rush to improve financial aid by Harvard, Yale, Stanford, et al 2 years ago was driven in part by threatening language from some in Congress regarding removing the exemption.
  • Padre13Padre13 Registered User Posts: 294 Junior Member
    Just to clarify, I meant an exemption from the payout requirements. Some colleges with large endowments were not paying out at the minimum level required of foundations (5% I think). By increasing financial aid they exceeded those thresholds and headed off moves in Congress to enforce minimums. Of course, now that those endowments are off 20+% it has become a non-issue.
  • BaltoBalto Registered User Posts: 63 Junior Member
    I think we can all agree that this is a dead letter for now.
This discussion has been closed.