@Hanna, social security spending is not constitutional because it is not part of the 18 enumerated powers in the constitution. The federal government does have the power to tax but not to spend for that purpose. I find the assumptions behind these ‘subsidy’ conversations infuriating. When someone pays less tax it is not a subsidy. A subsidy implies that an individual’s property and labor is actually owned by the state ; in essence slavery.
Suppose charitable donations are no longer deductible. I donate $100 from my taxable income to a well-run research university. Now I also must pay the federal government a tax on the income I just gave away? That’s money that is no longer available for the next charitable donation I would have made. Is this a good outcome? I don’t think so.
The tax deduction for charitable contributions incentivizes and empowers the taxpayer to make investments for the public good, from income that otherwise would be fully subject to tax. It reserves a small piece of investment decision-making power for the taxpayer, before handing over the rest of that decision-making power to the federal government. This is a good thing for institutions whose work benefits the public. It’s a good thing for civic engagement.
I know scipio, I have worked with scipio, and scipio is a friend of mine. If he says he can educate masses in gender and women’s studies and art history, then I trust him.
We will start a petition started right away to hand over all the money to scipio.
Arguably the best result would be to flatten and lower the tax rates and eliminate all deductions, but that would remove the ability of congress to extract donations from lobbyists. That seems to work pretty well on a state level.
Charitable giving (and its corresponding tax deduction) is supposed to be to encourage giving to those in need. An institution sitting on millions or billions in endowments is not in need of charity.
And funding state Us won’t benefit the public? For healthy democracy, we need a huge mass of well-education public, not a small number of ultra elites. In fact, oversupply of ultra elites may harm democracy. Isn’t Wall Street a case of an oversupply of talents? They had to create financial instruments to get themselves all employed driving the country to ruins.The same may be true of law professions. They probably drive up the number of lawsuits to hire themselves.
How about just making tax advantage equitable? Instead of Priceton $100,000 per student vs $12,000 for Rutgers, we make it even both $50,000 per student? One could include charitable contributions in Alternative Minimum Tax calculation taxing contributions at 20%. Nonprofits could pay tax at half the rate.
It won’t happen but we could think about. While we are at it we could also think about how this may affect social more;it’s a case of subsidizing well to do, not too different from bailing out Wall Street. All that may contribute the polarization of our society, rich gets richer, etc. Is that where we want to go?
And about public Us wasting taxpayers’ money, which institution do you really think waste more; one that gets over $100,000 per student or $10,000 per student? Public institutions will have to waste 100% of their funding to match 10% waste at a private u.
Is is all about you? 
But don’t forget: many people donate to causes but do not itemize, so their ‘tax deduction’, such that it is, is rolled into the Standard Deduction. One possibility is to eliminate the itemized tax deduction and increase the standard deduction by an equivalent ($) amount.
Maybe if we all go together, we could storm the Winter Palace!
Here is a question. If Yale and Harvard weren’t tax exempt, how much tax would they pay (federal, state, local, etc)?
I do think that large tax exempt organization like these need to pay some local tax to help pay for the local services and infrastructure which they also use.
why should the government get a cut of people’s donations to Yale?
if people wanted to give money to the government, they would’ve written their check to the government. But they didn’t, they wrote it to Yale.
that said, maybe we can pay for public schools by taking money from rich private schools? maybe one candidate should look into this…
edit: also, if you’re going to hit the schools, perhaps the Gates and Clinton foundation (and others) should be up next. After all, those are both basically tax shelters for some of the richest people in the world.
do they pay property tax? At state schools, the state owns the land, but I assume private schools own their own land, and are paying a pricey sum to hold onto it each year? Perhaps they are not…
Here’s another article at the national level:
http://thehill.com/policy/finance/274951-college-endowments-under-scrutiny
@soccereguy315, much better posts.
http://yaledailynews.com/blog/2013/03/05/yale-braces-for-federal-cuts/
The above is a little dated but it has numbers. Yale’s medical school is reliant on the federal government.
I read that Yale owns $2.5 billion in property that is not taxed.
I am not in favor of the Connecticut tax proposal that affects Yale.
I believe the proposal was to tax the gains of the endowment that aren’t spent on students. The tax would be 7 percent of the gains not spent on students.
So, if the endowment increased in value by $250 million and $125 million was spent on students, $125 million would be taxed at 7 percent. The tax would be $8.75 million.
I don’t like taxing unrealized capital gains. I may want to tax the endowment more or less but I would want to tax income and realized gains. Unrealized gains may be phantom gains.
I have not memorized the proposal. I may be wrong about the proposal. I haven’t looked that carefully at Yale’s financials. I reserve the right to change my mind.
It doesn’t matter what I want or what I would do anyway. 
I dislike the foundations also. Since the wealthiest most powerful people have foundations, I doubt this country is going to get rid of the foundations.
Too be a little more accurate,
I believe the numbers are 10 times more for Yale’s last fiscal year.
It’s called a PILOT (Payment In Lieu of Taxes), and Yale does pay into New Haven’s coffers. Many other colleges pay PILOTS to their local communities. (Whether its a “fair” amount for the services used, I have no idea.)
Are we only talking about donations to rich private colleges like Yale?
What about tax-deductible donations to all colleges, as well as hospitals, churches, charitable foundations, etc.?People presumably donate to these institutions because they believe they make better use of the money than the US government or for-profit alternatives. Whether or not they’re always right, in my opinion it is a fair practice to allow taxpayers first to donate a portion of their income however they like, then be taxed only on the remainder. For instance you earn $100K, give a tithe to your church … then get taxed only on the remainder (not the original $100K).
The endowment “hoarding” issue is separate. Regardless, maybe we are barking up the wrong tree?
Instead of punishing a few institutions for being successful, maybe we should ask ourselves why we fell for theories like “supply side economics”, then stood by for 30 years as tax cuts alone failed to generate enough revenue to meet our needs.
Or maybe we should ask why all colleges can’t do a better job of getting their alums excited about “giving back”? Why target the ones who clearly excel at it?
Because that’s where the money is at…
That’s where the money is because the schools do an exceptional job of commanding loyalty among their alums. That’s not a a proprietary formula that only Chicago, Northwestern, et al can do.