Tax Reform Could Impact Higher Education

Congress is considering major tax overhauls that would, among other things, impose an excise tax on the investment earnings of endowments at wealthy colleges and universities. Nearly seventy private institutions of higher education would be subject to the new tax, which only affects schools whose endowments exceed $250,000 per student. Public universities would be exempt. Only 30 of the top 300 research institutions in the U.S. fall within the list. Among them are Harvard University, Stanford University, MIT, Yale University, and Columbia University. The House and Senate have drafted their own versions of the tax reform bill. Both bills contain the provision regarding college endowments. The House of Representatives is expected to start debate on H.R. 1 this week. The Senate will begin committee mark up during that same timeframe. The House bill also includes a provision that would eliminate individual deductions for college tuition, interest, and other education expenses. This would increase taxes for many graduate students because tuition waivers would be taxed as income. The Senate bill does not appear to make any changes to current tax law in these areas. As congressional leaders have signaled a desire to move these tax plans though the legislative process on an expedited schedule, individuals who wish to share their opinions about the plans with their elected Representative and Senators should do so via phone and email immediately.      
Source: Public Policy Reports - Category: Biology Authors: Source Type: news