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The College Endowment Tax Is a Bad Proposal

This tax has nothing to do with sound economic policy. Rather, it is the punishment of liberal colleges and universities.

This letter appeared in The Wall Street Journal, January 18, 2018

Regarding “Tax on College Endowments Sparks a Spat” (U.S. News, January 3): Sen. Mitch McConnell’s attempt to exempt Berea College, which resides in his home state, from the endowment excise tax provides proof positive that this tax has nothing to do with sound economic policy. Rather, it is the punishment of colleges and universities perceived as the liberal elites.

Raising $1.8 billion over 10 years will have a minuscule effect on the federal budget; however, it will have a significant negative impact on these colleges—and the students who attend them. Increasing access to higher education is a critical problem of our times. This tax will make that problem harder to solve.

These 30 institutions produce cutting-edge research and the future leaders of our country. Further, they are among those that offer the most generous financial-aid packages. For example, at Smith College 60 percent of students receive need-based aid from the college, totaling almost $66 million.

American higher education is the envy of the world and a key to American exceptionalism. Both sides of the aisle need to recognize this.

Kathleen McCartney
President
Smith College
Northampton, Mass.