Recent legislative tax provisions pose significant threats to the nonprofit sector, particularly through proposed amendments to the university endowment tax. This amendment, part of broader tax reforms, uses tax policy as a political tool against universities, transforming long-standing norms in government relations. Though critics often overlook existing taxes on endowments, the implications of these changes could challenge the foundations of pluralism and democratic governance and bring about unintended consequences for civil society.
The proposed amendment to the university endowment tax represents a significant shift in government-nonprofit relations, leveraging tax policy as a political tool against institutions of higher education.
Most critiques of universities overlook the fact that their endowments are already taxed, as mandated by the 2017 Tax Cuts and Jobs Act, which imposed a 1.4% tax on large private college endowments.
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