Connecticut May Raid Yale’s Endowment for Much-Needed Cash
28th March 2016
A bill introduced to the Connecticut Senate would tax the annual gains of any college endowment valued at over $10 billion. The high threshold effectively singles out Yale, as no other schools in Connecticut even come close to having an endowment that large. Yale’s endowment of about $26 billion is the second largest in the country, behind only Harvard University’s gargantuan $38 billion nest egg.
This is the sort of thing that the Tax Code specializes in — a provision that appears to be generally applicable but is specially crafted to help or hurt specific interests.
Connecticut needs money because of a rapidly-growing hole in the state’s budget that lawmakers are desperate to fill. The state has a current budget shortfall of $266 million, and its unfunded pension liabilities total about $26 billion, one of the most underfunded pension systems in the country.
Yale will soon find out that the problem with socialism is that you eventually run out of other people’s money.
Yale certainly presents a tempting target to lawmakers. In contrast to regular citizens or businesses, the historic school can’t simply relocate to avoid taxes.
Heh.