Rep. Troy E. Nehls Introduces Bill to Hold Elite University Endowments Accountable

WASHINGTON, D.C. -Today, Congressman Troy E. Nehls (R-TX-22) introduced the Endowment Tax Fairness Act, a bill that would raise the excise tax levied on certain private university endowment profits from 1.4% to 21%.

"Elite private universities have accumulated and sit on massive university endowments and pay a tax less than 2% on the investment earnings of their endowments, which is far lower than what most hardworking Americans pay in taxes," said Congressman Nehls. "Meanwhile, these universities have significantly increased tuition on America's youth, which has overwhelmingly surpassed the average annual inflation rate. This is unacceptable. My bill would put elite universities with massive endowments on notice by holding them to the same tax standard as corporations."

Specifically, the Endowment Tax Fairness Act would:

• Raise the excise tax levied on annual private university endowment profits from 1.4% to 21%, in line with the corporate tax rate, beginning after the date of enactment of the legislation.
• Only apply to private colleges and universities with 500 or more students with an aggregate fair market value of assets of at least $500,000 per student of the institution, and more than 50% of the student body is located within the United States.
• Revenue derived from this bill would be deposited in the general fund of the Treasury and be used for national deficit reduction purposes.

Congresswoman Lauren Boebert (R-CO-04) is an original cosponsor of this legislation.

Background

Prior to the enactment of the Tax Cuts and Jobs Act (TCJA) of 2017, net investment earnings on endowments of private colleges and universities were not taxed. Upon the enactment of the TCJA of 2017, an excise tax was levied on annual private university endowment profits at a rate of 1.4%.

As of Fiscal Year (FY) 2022, endowments subject to the tax hold a combined $270 billion of assets under management and include Harvard University, Yale University, Princeton University, Stanford University, Massachusetts Institute of Technology (MIT), the University of Pennsylvania, Northwestern University, Washington University, Duke University, and Vanderbilt University.

Read the bill text HERE.

Read the Fox News exclusive HERE.