May 3, 2016

YOU CAN ONLY ACCUMULATE FABULOUS WEALTH WHILE SUPPORTING REDISTRIBUTION FOR SO LONG: Taxpayers Eye the Ivory Tower.

There seems to be no safe haven for America’s wealthiest colleges these days. Congressional Republicans have been asking pointed to college presidents presiding over endowments in excess of $1 billion about how the funds are being spent; Connecticut legislators briefly pondered stripping the Yale endowment ($24 billion) of its tax-exempt status; and now, local taxpayers in Princeton, New Jersey, are trying to force their local university (endowment: $23 billion) to pay property taxes on its large swathes of real estate. . . .

Part of the impulse in Connecticut and New Jersey is the result of failed governance of these states, which have massive unfunded pension obligations and bloated public sector workforces that make it impossible to fund basic social services without squeezing taxpayers for more and more. But part of the impulse also stems from the failure of the elite higher education establishment, which seems to more and more Americans like an expensive luxury that primarily functions to perpetuate the privileges of the already-wealthy or the politically favored, all while reaping expensive tax subsidies from ordinary Americans who can never dream of an Ivy League education. Highly-endowed colleges, in other words, seem like an underperforming asset, whose wealth would better be put to use for other purposes.

And the notion that deciding what purposes other people’s wealth should be put to is a legitimate political choice — once anathema — has been mainstreamed by the academy.

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