Thursday, May 15, 2008

Glenn Beck: Tax-free hypocrisy from higher education

Via CNN (emphasis added):
There is an industry in this country that is making billions in profit while average Americans are struggling to fill up their gas tanks.

It's an industry that made an average profit of nearly 17 percent in 2007 while most Americans could barely keep up with inflation.

It's an industry whose members paid a grand total of zero dollars in tax on their endowments last year.

Are you outraged? Are you ready to call on Congress to investigate or demand that a "windfall" tax be placed on these egregious profits?

Well put down the phone because the industry I'm talking about is Higher Education. And make no mistake, it is an industry.

The top five college and university endowments reported a combined value of over $100 billion at the end of 2007. That's five funds, a hundred billion in cash. Not a nickel in tax. Not an ounce of outrage.

Harvard University, which has the largest endowment in the country, has a total of $34.6 billion. To put into perspective just how much money that is, consider that the largest charitable foundation in the world, the Bill & Melinda Gates Foundation, has a total endowment of $37.3 billion.

But while their financial statements may look similar, their missions aren't. The Gates Foundation is working to cure malaria, develop new tuberculosis vaccines, and stop the spread of AIDS. Most of our colleges and universities are only working to spread the radical political views of some of their professors.

Let me be clear: I have absolutely no problem with Harvard or any other school having billions in cash. In fact, good for them!

I have no problem with Harvard posting an unbelievable 23 percent rate of return on their money last year. The truth is, I'm jealous of it.

I have no problem with the fact that if you project Harvard's endowment out using their historical rate of return they would have over half a TRILLION dollars in 20 years.

I don't even have a problem with Harvard not paying one dime of tax on any of that money.

What I do have a problem with -- and it's a big one -- is how Harvard spends that money. Or, maybe it would be more accurate to say how Harvard, doesn't spend that money.

Schools with large endowments (at least $500 million) reported spending an average of 4.4 percent of their stockpiles in 2007. Meanwhile, those same schools made an average of over 19 percent on their money.

But I also have another problem, and that is how these sanctimonious institutions who are so good at complaining about the injustices of our government are nothing but really highly educated hypocrites.

For what's been estimated to be about $300 million a year (less than 1 percent of their endowment's value) Harvard could completely waive tuition, room and board for every single one of their students. Instead, they announced an increase in those fees of about 3.5 percent for next year. Being a student at Harvard will now cost a staggering $47,215 a year.

Doesn't Harvard know how many millions of Americans are struggling to afford college? Don't they want to pay their fair share and help those who are less fortunate?

Some politicians in Massachusetts who can't stand to see so many billions dangling just out of their reach, have proposed a new tax on large university endowments. They don't have a cute name for it yet, so let's call it an "endowment windfall tax."...

...So how did Harvard, which is basically the Exxon-Mobil of higher education (minus the accusations of price-gouging), react to that proposal? In a word, conservatively.

"You'd be taxing success here," Kevin Casey, Harvard's associate vice president for government, community and public affairs complained in a quote that will soon be framed and hung in my office. "Over time, this would put us at a real competitive disadvantage, which would drastically hurt the Commonwealth."...


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