STEPHEN MOORE: Want To Soak The Rich? Tax Elite Universities’ Prized Endowments

Republicans are searching for ways to “pay for” their tax cuts. Democrats want the rich to pay more tax. Here’s a solution that should make everyone happy.

House Ways and Means Committee chairman Jason Smith is suggesting a tax on the $840 billion college endowments. These endowments will soon eclipse $1 trillion in size – which is more money than the entire GDP of many countries.

It’s high time that bloated and entitled universities pay “their fair share” for the government services they use.

Why not? Their professors forever lecture us about tax “fairness,” but the schools where they teach a few hours a week for their munificent salaries are the very embodiment of mostly-white “privilege.” They are are the richest institutions in the world that go untaxed.

The cost of this leakage to the tax base is going to grow exponentially as this generation of billionaires (Bezos, Gates, Zuckerberg and others) pass on trillions of dollars – much of it will enter into the vaults of the universities. These are capital gains that have NEVER been taxes – and never will be.

Why is this a problem?

A good and just tax system has a broad base – so everyone pays – but a low rate so the tax system doesn’t discourage, work, saving and investment. This means no loopholes and carve outs that allow the rich to keep their fortunes out of reach of the tax man.

What makes the college endowment scam even worse is that the preponderance of the dollars don’t go to small colleges or community colleges, but rather the Harvards, Yales, Stanfords and Princetons that are already layered with gold and service the elite of society.