Monday, May 19, 2008

Poetic Justice

"Massachusetts legislators, demonstrating a growing resentment against the wealth of elite universities in tight economic times, are studying a plan to levy a 2.5% annual tax on the portion of college endowments that exceed $1 billion. ... Based on the most recent size of Harvard's endowment, the university would have to shell out more than $840 million annually. ... Kevin Casey, a spokesman for Harvard ... said Harvard would have to raise money to pay the tax because so much of the university's endowment is already tied up by restrictions on gifts", WSJ, 9 May 2008.

Delicious. A liberal institution like Harvard might be hoist on its own petard. "Raise money to pay the tax", says Casey. Is he Ernest Thayer's "Mighty Casey", who struck out? Why? Do idiots run Harvard? Larry Summers, former Harvard president, what do you think? Harvard should have some HBS professors draft moving plans. To Texas. Harvard, have Exxon which moved its headquarters to Irving in 1990, plan the move. Which I'm sure Exxon will do gladly. For a fee. How much is at stake? Let's capitalize $840 million at 9%, that's $9.333 billion Harvard could lose. Let's fill those moving vans! Now.


PrintFaster said...

Harvard is a business, pure and simple. If we are going to tax Exxon, then taxing Harvard for its role in promoting elitism, is more than fair.

For parents putting over a quarter of a million into a college education which can be had for a fraction at a state institution or lesser college, such large endowments are an abomination.

I guess the state is jealous of the vast sums of money that Harvard has and wants to take it.

Perhaps the right attitude is to drop all theft taxes, whether they be from business or personal income. The constitution allowed only for ungraduated taxes until the 20th century, and relied largely on tariffs for funding.

In the longer view, the use of Harvard and colleges will disappear as the internet replaces the seat and instructor with the talking head.

Edgar Alpo said...

The elite have stolen all the money and it is mostly all safely off shore in tax shelters. Harvard trains criminal and grifters.

tvoh said...

As a denizen of the Peoples' Republic of Massachusetts, I see Hahvuhd et al fighting back and winning.

When Fidelity was so threatened they suggested that a relocation of some operations might be in order. The Commonwealth gave in. Ditto Raytheon.

Now, a university can't do that, but they could say we are opening a satelite campus in New Hampshire as the environment here is not so inviting and we might move some programs there.

Would it work? The quality our General Court (the official name of our legislature that long predates 1776) is most known for is not courage.

My bet, outside of some token charges, nothing much changes.