Oct 242008

George Will informs us that Congress is casting a greedy eye on tax-free university endowments. (“Washington’s Willie Sutton Moment“) It wants more money to control, so it wants to control how these endowments are spent.

I agree with Will to some extent. We should never miss an opportunity to point out that corporate greed is mainly a problem of government greed (governments being our largest corporations).

But instead of just complaining, I wish Will would suggest something positive, like removing the tax-exempt status of university endowments. It would be a positive step toward creating a society in which there are no privileged classes – where we’re all in it together. When it comes time to discuss whether taxes should be raised, then all of those articulate people who are running our nation’s universities would have a stake in the issue, too. As it now stands, they always want more taxes to pay for more student loan programs, for research grants, for this program and for that. They are oblivious to the downside, of how their demands for money can destroy the tax base needed to support the institutions they run. Removing their tax-exempt status would motivate them to think harder about sustainability — about how we can sustain the economic engine that is needed to support our universities and make them even greater.