Thursday, May 29, 2008
Lion Bites Tamer
One of the most uplifting headlines I have seen recently was this:
Lawmakers target $1b endowments
Massachusetts lawmakers desperate for additional revenue are eyeing the endowments of deep-pocketed private colleges to bolster the state's coffers by more than $1 billion a year, asserting that the schools' rising fortunes undercut their nonprofit status.
Legislators have asked state finance officials to study a plan that would impose a 2.5 percent annual assessment on colleges with endowments over $1 billion, an amount now exceeded by nine Massachusetts institutions. The proposal, which higher education specialists believe is the first of its kind across the country, drew surprising support at a debate on the State House budget last week and is attracting attention in higher education circles nationally.
The idea has prompted a range of questions, including whether it is legal to infringe upon private colleges' tax-exempt status or single them out based on their wealth. It also faces significant opposition from the colleges and some skeptical lawmakers.
But proponents say the colleges' vast accumulations of wealth - Harvard University has the biggest endowment at $34 billion - and their often modest contributions to their host communities justify the assessment.
Of course this bill will never get passed. For sure, Harvard can buy off politicians with far less than the annual $800 million tab it would suffer under the proposal.
Even though this legislation will NEVER see the light of day, I derived some pure joy from its bitter irony - the biggest class-baiters around having their wealth envied!
What, was it just a week or so ago that I opined on this very subject of Harvard hypocrisy? See Self-Segregating, Bigoted, Hypocritical Anuses.
The Boston Globe already reflexively stood up in defense of Harvard's (and their own) hypocrisy:
Meanwhile, lawmakers have more sensible options for bringing spending and revenues in line, such as cutting earmarks, asking state employees to pay more of their health insurance, and raising the income tax.
They titled their editorial "How To Strangle An Economy". Well, I am not going to argue against their level of expertise on that subject - even if their know-how is unconscious.
Yeah, "raising the income tax" is a more "sensible option" than taxing multi-billion dollar idle, bureaucracy entrenching, do-nothing endowments. As one blogger surmised, Is Harvard Just A Tax-Free Hedge Fund?
Remember my buddy Greg Mankiw? In response to this proposed tax initiative, he suggested that Harvard pack up and move South. I say good riddance. Check that. Harvard stay here - I don't want him anywhere near me when I eventually flee this miserable state.
More from the Wall Street Journal:
Such wealth has led Sen. Charles Grassley, the senior Republican on the U.S. Senate Finance Committee, to propose mandating that the largest college endowments make the same 5% minimum annual payouts as private foundations are required to do. In many years, many colleges have spent much less, provoking criticism that they are hoarding their wealth instead of spending it on educating students. In this hostile environment, some of the wealthiest colleges, including Harvard, have recently sweetened financial-aid packages.
State Rep. Paul Kujawski, a Democrat from Webster, Mass., who is a main proponent of the tax on big endowments, calls the size of the biggest endowments "exorbitant," raising questions of whether they are truly nonprofits.
Kevin Casey, a spokesman for Harvard, said the proposal would hurt Massachusetts and colleges because it would damage "stable bedrock institutions" that have helped shield the region from the worst of the economic slowdown
Did you get that last point? Harvard, all by itself arrogantly thinks that it shelters Massachusetts from an even worse economic plight. Anyone up here who believes that well-deserves the plight of Boston living.
The Harvard "spokesperson" really illustrates the thesis of my post. The bags o'scum at Harvard have rung the bell of class warfare for decades. They've scared away all private enterprise and empowered a monolithic army of socialist politicians. Far from saving or behooving the shell of a market economy up here, they've actually ruined the area for everyone else. AND, now that those same demented pols have targeted them, Greg Mankiw and his cronies threaten to pack their stuff and move on out.
It's all rather incredible.
Here are some alternate titles for this post that I "workshopped":
Do ONLY Unto Others
Dr. Frankenstein Attacked By The Creature
Utopia Bites Utopists
And the runner-up...
Big Government Taxes Itself
If this proposal had a snowball's chance of passing....it might have interrupted my Ted Kennedy Cancer Celebration!
And, you people (cowardly emailing me on the side) that are uncomfortable with my schadenfreude need to wise up. Ted's demise behooves the "greater good". If you don't understand that concept, then I suggest reading more Big Media agitprop or auditing a couple courses at Harvard.
If you opt for the latter option, be prepared to shell out some $$$. The student loan market is frozen, home equity lines are shut off, AND I wouldn't expect any help from the $34 billion endowment!