The College Endowment Accountability Act, according to Sen. J. D. Vance, responds to “a problem, borne of unfairness and of mass subsidy from the American taxpayer, that has now metastasized into one of the most-corrupt and one of the most politically active and politically hostile organizations in the United States of America, and that is elite colleges.”
On Thursday morning, U.S. Sen. J. D. Vance introduced the College Endowment Accountability Act on the Senate floor. The Ohio Republican’s legislation would increase the excise tax on endowment net investment income from 1.4% to 35% for secular, private, nonprofit colleges and universities with at least $10 billion in assets under management.
Vance sought unanimous consent for the bill. Sen. Ron Wyden, the Oregon Democrat who chairs the Senate Finance Committee, blocked it. The bill will now be referred to the Finance Committee.
As of FY2022, according to the Senator’s office, endowments subject to the tax hold a combined $270 billion of assets under management and include Harvard, Yale, Stanford, Princeton, MIT, Penn, Northwestern, Columbia, Washington University in St. Louis, Duke, and Vanderbilt.
“I rise today to speak to a particular problem in America’s higher-education system,” Vance said on the Senate floor. It is “a problem, borne of unfairness and of mass subsidy from the American taxpayer, that has now metastasized into one of the most-corrupt and one of the most politically active and politically hostile organizations in the United States of America, and that is elite colleges.
“How is it,” the Republican from Ohio asked, that universities, which “should be responsive to the public will, responsive to their donors and alumni, responsive to their students, how is it that they can go so far so fast without any pushback?”
The answer, Vance continued, “is university endowments, which have grown incredibly large on the backs of subsidies from the taxpayers, and they have made these universities completely independent of any political, financial, or other pressure, and that is why the university system in this country has gone so insane.”