Academic Freedom Podcast on the University Endowment Tax

An explainer from Brian Galle

A new episode of the Academic Freedom Podcast has been released. The podcast is sponsored by the Academic Freedom Alliance and the Center for Academic Freedom and Free Speech at Yale Law School.

This episode features a conversation with Brian Galle, the Agnes Williams Sesquicentennial Professor of Tax Policy at Georgetown University Law Center, an expert on taxation and nonprofits. Galle recently served as a senior fellow in the division of corporation finance at the Securities and Exchange Commission.

He joins us to talk about the proposed tax on university endowments now making its way through Congress. The Republican House Ways & Means Committee issued a press release proclaiming that their bill "holds woke, elite universities that operate like major corporations . . . accountable." The House bill would impose dramatic new taxes on universities, hitting a number of wealthy universities particularly hard.

What is the endowment tax and what is its significance for the future of higher education? The new episode can be found here.

Comments

[y81]

For anyone at Yale to prate about academic freedom is a farce. Have you no shame whatsoever? Talk to Erika Christakis and Trent Colbert about academic freedom.

[Supremacy Claus]

In their IRS 990 forms, these universities pledged to provide education in exchange for being tax exempt. In education, one presents all aspects of a subject to students. In indoctrination, only one side of the subject is presented. To the degree they are woke, these universities committed tax fraud. Yes, the theory that the sun turns around the earth or that the earth is flat should be presented. People who cast doubt on it were executed. The reason to not believe one's eyes will enrich that astronomy class.

Seize their entire endowments in civil forfeiture.

[JD85]

Why stop at university endowments? Treat people equally, tax all endowments and trusts equally.

[y81]

Wow, you thought your local hospital was expensive before, wait till they’re paying income and property taxes. They will probably go out of business. Tough luck, sucker!

[Krayt]

These same shit politicians wanted to tax "cadillac" medical insurance plans.

These are murderous class warfare dogs. Spare me the crocodile tears for poor decisions by self-serving politicians.

"But the rich...!" If you want government to support medicine, research, insurance, hospitals, whatever you want, tax something, anything except medicine-related stuff itself.

Accept no less as these mass-murdering politicians glibly stomp around lives like a bull in a medical glassware lab.

[bye]

This is all predicated on govt taking any increase and from that increasing expenditure ...why!! If govt gets reined in then overall taxes will be less, whatever part goes up.

[JD85]

I see that you think hospitals use their endowments to reduce healthcare costs, and not to self enrich and expand / build new facilities.

Do you have any evidence to back up this claim of yours? Any evidence that non-profit hospitals are cheaper than for profit hospitals? Any evidence that care is better at non-profit hospitals than for-profit hospitals?

I'm not going to do your work for you.

If you're problem is with healthcare being expensive, then you should (as you believe non-profit hospitals with endowments make care cheaper) advocate for collective improvement instead of relying upon the grace of the wealthy. The billionaires and millionaires who fund endowments aren't somehow better at deciding policy just because they made money in, say, finance.

I'd also point out that I didn't advocate they pay property taxes or income taxes. Just that, if you are going to tax endowments, all endowments should be treated equally.

[bye]

I missed your point
The average endowment at the top 20 colleges with the biggest endowments is nearly $18.6 billion. All but three of these schools – Texas A&M University, the University of Michigan—Ann Arbor and the University of Virginia – are private.

Current President of the NON-PROFIT Harvard makes $1.2 Million.

[y81]

That is not out of line with the salaries of CEOs of other major nonprofit institutions, and well below what the president of a for-profit institution of the same size would make.

You couldn't pay me enough to deal with a bunch of professors like the self-righteous hypocrites at Yale. And the students and alumni are worse.

[bye]

Love it when someone posts something like this that totally supports me while being blind to their misreading of their own statement !!!!!!!!!!!!!!!

$1.2 million can't be too much because other CEO's of nonprofits make this much !!! And that's an argument ?????

I repeat : The average endowment at the top 20 colleges with the biggest endowments is nearly $18.6 billion.
Of how many non-profits is that true ????

[JD85]

I'd argue strongly that CEO pay has become untied from typical economic indicators & value generation, instead being driven by board members whose advocacy for higher CEO pay translates directly to higher pay for themselves, as they often hold similar positions at other companies.

See Zaslav, David for a key example.

[y81]

Well, it must be nice to know the right price for everything. How much should a gallon of milk cost based on its true value? How much should a neurosurgeon make? What about a partner at an Amlaw 100 firm? Be precise and show your work.

[JD85]

There's a liquid (pun intended) market for milk - people will buy it or not based on it's cost.

Neurosurgeon prices are set similarly - people need surgery, insurance providers negotiate with lots of neurosurgeons to set the price (previously doctors negotiated directly with consumers for their services pricing).

Lawyer's sell their services on an open market. People evaluate cost based against experience and capability.

For CEO's there's no such market. Price isn't set by consumers deciding what to buy or not on an open market. It's set, instead, by a captured market of board members who are incentivized to increase price.

[JD85]

https://www.epi.org/publication/ceo-pay-in-2021/
https://phys.org/news/2025-05-pay.html
https://www.sciencedirect.com/science/article/pii/S0165410124000387?via=ihub

[CJColucci]

I'd like to see a Venn diagram of people who: (1) endorse an endowment tax and (2) oppose wealth taxes.