The real horror here is that much of the income doesn't go to lower tuition or raise faculty salaries. It goes to raise the salaries of ignorant, poorly-educated administrators and semi-literate coaches while adjunct faculty qualifies for food stamps.
29
That Norman I. Silber, law professor at Hofstra University -- any relation to John Silber, of BU notoriety?
3
I think those in a university, faculty, students, staff, need to come to grips with how it all works. Right now, the ONLY way to make money to pay for labs and repairs, and tuition other then directly from students or student loans and scholarships, is via an endowment.
That endowment is going to be invested in a variety of things from stocks, to bonds, to real estate, gold, and other types of investments. That is how capitalism works. Your 401k or 403b is the same way. That is not to say, you are not limited and can choose to invest in ESG (environment, social, governance) ETFs and mutual funds, which avoid a variety of very very bad things like; fossil fuels, tobacco, arms makers, slave labor, exploitation of women, etc. There are even ESG options for religious schools who do not want to invest in things… they do not want to invest in.
So while the offshore account options employed by the university are a bit yucky, but legal, the faculty, students, and staff CAN argue and demand that the university divest in XYZ bad stuff and focus only on ESG investments for the endowment and all employee retirement options.
Personally, I think if a school accepts ANY federal funding at all for research or anything, they need to bring all that money back on shore and suck it up. That is the moral thing to do.
9
It should never be legal to park profits off shore. The most outrageous thing about the actions of these universities is a) the subsidies they receive from the government to take in students that cannot afford to attend and b) the fact that every other student (and parents) pay through the nose to send their kid to a 4 year college where they are not even taught to think at a price tag that increases by double digits year over year.
6
Just because something is not illegal does not make it right. Legally allowing these tax havens and opaque financial reporting of our educational institutions further erodes public trust, further divides our country based on wealth, and shows hypocrisy when universities lecture one way but behind the curtain invest another.
12
This should not be a surprise to anybody - how else would Harvard accumulate $37B. Large college endowments like the Ivies and other institutions are nothing but tax advantaged hedge funds. To me the wonder is why it has taken so long to catch up to this fact given liberal animus to the wealthy and privileged which is truly what these large institutions are.
Kudos to the proposed tax plan for proposing to tax these endowments. Not sure the proposal is the best, but any school that has accumulated wealth beyond their need to accomplish their educational purpose should be taxed - it is only fair to the rest of society. And this doesn't even recognize the massive tax break the educational institutions get in lower real estate taxes or financing costs through tax exempt bonds.
The educational institutions must be answerable to society and pay their fair share if they are supposed to get the tax break. This tax should be a progressive tax and not be borne by those institutions that do not have the financial resources to accomplish their educational purpose
10
I agree with Brian from Philadelphia and like to add a few pieces of information. First, public pension funds and retirement accounts are similarly tax exempt and use exactly the same blocker structure to eliminate unrelated business income.
Second, it's worth reiterating that endowments are by definition exempt from taxes on most of their income. For example, even if there was no offshore blocker corporation, the law does not impose taxes on endowments, pension plans, etc. on income from corporate dividends, interest or capital gains. These items are not treated as unrelated income unless (1) they are acquired with debt or (2) generally, they are certain types of fee income. Only these categories are being "blocked".
Third, using a corporate blocker doesn't mean there is no tax, because there is still corporate level tax paid by the blocker entity.
4
"officials at most of the college and university endowments that use blocker corporations, including Colgate, Dartmouth, Duke and Stanford, declined to comment ..."
This has little to do with education - what we see is tax avoidance that allows the colleges to shirk civic duty ... and pay obscene salaries to the administrators. All the while squeezing the students to the last penny.
11
While larger private colleges have benefited from the tax provisions noted by Professor Eaton (deductible donations to endowments, untaxed endowment investment returns, and use of tax exempt municipal bond borrowing in place of endowment assets for capital projects), there is a lack of perspective in two regards. First, as a matter of scale, tax benefits of $20 billion a year are barely 0.5% percent of Federal revenue, and are less than 1% of the cost of proposed slashing of rates for corporations and wealthy individuals. Second, colleges do promote social mobility (they could do more, but at least they are more effective in that regard than most for-profit entities), provide jobs and consumers for their communities (which may explain why they issue municipal bonds for college construction projects), and are important sources of technological innovation that help keep our country competitive in the world economy.
2
For a supposedly educated readership, the comments here sure don't show it.
It seems like most readers just see a few key words - "billion", "no-tax", "offshore", and "corporation" and just base their opinions on that.
These "blocker corporations" could use some more description/explanation. From what is given, it's not even clear that these are actually even cheating anyone of anything. From my understanding of tax law, the earnings of these blocker corporations should be taxed upon bringing them onshore. If so, they wouldn't be avoiding taxes, but deferring them (just like we do with traditional - non-Roth - retirement accounts). Again, if that is the case, the benefit should be primarily to tax-exempt entities, in that the exemption is effectively able to go deeper into the business (as opposed to owning equity in regular businesses which pay taxes before distributions to the owners). Pass-through entities exist on-shore as well (REITs, BDCs, etc.).
Here's a crazy idea to make things simple: Make all businesses pass-through. At the same time, adjust how investment income is taxed - eliminate the preferential treatment of qualified dividends and long term capital gains (maybe work something out so that inflation isn't taxed and apply it to bank accounts, too). That makes most of the tax chicanery go away, and the tax paid on the business income is based on each individual taxpayer.
4
This is just about the most sickening article about greed that I've ever read. No wonder OUR children aren't being educated. Greed uber alles - even in our esteemed educational system. More proof that people are people and GREED MUST BE REGULATED.
Universities and colleges owe nothing to "investors". Time to outlaw all education endowments. Apparently they are nothing but tax shelters for the donors and the people who run OUR educational establishments. Same with medical foundations and endowments. Outlaw them all.
4
The universities and colleges (through their endowments) ARE investors. They're the ones benefiting from their part of these arrangements.
4
"While legal, blocker corporations are part of a system of endowment tax breaks fueling an undercurrent of populist anger. Many students across the country struggle under massive college debt. At the same time, critics say, some wealthy schools use these tax advantages to stockpile endowments that exceed the gross national product of entire countries."
Are the students who struggle from massive college debt graduates (or former students) of the schools with the schools with large endowments? I don't have any data, but it may very be that the Harvard, Yale, etc. graduates are coming out without much debt (quite possibly because of their parents' resources), while the graduates of the state schools are coming out with all the debt? Further, the universities using the advantages to "stockpile endowments" can only benefit the students - some of the earnings of the "stockpiled" endowments contribute to the universities' endowments, do they not? Is this any different than investing in traditional equities, except that the returns are expected to be greater?
It seems like the people getting popularly angry and criticizing are just reading the keywords and not bothering to understand anything.
4
I agree with you. To the extent that investments help a university guarantee that there will be no financial barriers to the students they admit--I'm thinking of Stanford here--any way they can make money legally is a good thing.
The two issues likely to fuel legitimate anger are 1) using blocker corporations to invest in sectors supposedly off-limits to the schools' endowments, and 2) supporting a system that can be exploited for tax evasion by other types of investors.
2
These two recent hackings, the Panama Papers and the Paradise Papers, differ in key respects from other mass hackings which have been leaked to produce havoc over the past yearabouts. (I offer this word, "yearabouts," to our evolving language, as I do not think I have seen it previously.)
First of all, both the Panama Papers and the Paradise Papers were leaked by unknown individuals not reported to be linked to WikiLeaks or Anonymous.
Secondly, these hacks do not appear to compromise national security, nor do they involve an election campaign.
What they bring to light is that there a law firms which specialize in helping people and companies cheat on their taxes. That the "cheating" may be perfectly legal in some instances is beside the point, other than to underscore the fact that loopholes have been written into tax laws precisely to benefit plutocrats and corporations that buy politicians. I would not wish to include our universities, nor would I wish to include Madonna in that group. But as the saying goes, if one lies down with dogs, one gets up with fleas.
3
If it's perfectly legal, how is it "cheating"?
1
Well, suppose I have the resources, or just connections, to get a tax law written that exempts me and me alone from a certain tax.
That would be "perfectly legal". Would you consider that cheating? I would.
Incidentally, the example I give is real, not hypothetical. The year was 1976. The topic was the rescission of the oil depletion allowance. The individual given a pass was Russell Long. It is in the law. In black and white.
3
Keep up the good work. Taxes should be fair, and that means their impact should fall uniformly. All invested funds should be subject to tax. (I know, there are tax-sheltered individual savings plans, but I would even scrap these.) If we want to encourage people to save, pay a sliding scale subsidy for special savings accounts, starting with about a 90% bonus for the very poor, and cutting off entirely when the accumulation has reached the actuarial value of a modest retirement.
1
I feel like such a jerk, dutifully paying my taxes.
10
New Tax Haven, Connect-a-Cut
3
I always thought that the purpose of colleges and universities was to educate. How dumb was I?
7
It amazes me how parents these days don't flinch at $50-75k/year tuition fee's for an undergraduate degree. Who can afford that? And with multiple children?? How do students expect to pay back $250k in school loans? All the while these colleges and universities accumulate billions in endowments from donations and investments. Why does Harvard need a $35 billion dollar endowment? Why does it cost their students $65,000 a year to attend with an endowment that large? These aren't institutions of higher education. These are quasi -corporations with big-time salary's and expense accounts for it's executives and coaches. They are living high on the hog...at the expense of parents and students.
Colleges and universities should have one mission, and that is to educate, not make outrageous profits and hoard endowment money.
39
I can't speak for the private universities mentioned in this article, but I will speak about Indiana University, where I teach.
The vast majority of the IU Foundation holdings are from restricted gifts from individuals. The "profits" generated from the investment of these endowments goes largely toward scholarship money for undergraduates and graduate students. Some of it goes toward endowed chairs for professors, and supports their research and enables us to recruit faculty at the top of their field.
Every year, Indiana University gives out over $30M in financial aid to our students. That is income that comes directly from investment of the endowment- in other words, the kind of income you claim colleges are hoarding. Over one half of our undergraduates receive financial aid. While our in-state tuition is one of the lowest in the big Ten ($10,500) this is substantially defrayed for many students.
It is true that tuition costs (especially at private schools) are high. But scholarships at Indiana typically cut tuition costs for in-state students in half.
Indiana doesn't "hoard" foundation income. It is used to support our students and faculty. At a time when the state has been steadily cutting its support to public universities, it is important that we use every means possible to reduce costs to students and find ways to support our academic mission. Making "profit" on the endowments given by friends of the university helps us fulfill that mission.
2
I too agree that it seems outrageous. By and large, the sticker prices don't reflect the actual cost of attendance for most students. Colleges and Universities will use merit- and need-based financial aid to price discriminate against the richest students. Very few students pay those prcies. Rather, most pay inflated but less outrageous tuition fees. And the Ivies, with their large endowments, generally are very generous with their financial aid. A student at Stanford or Harvard whose family earns ~125K will likey not pay any tution. However, you can be sure that the children of billionares and multi-millionaires will be paying the full sticker price at these elite instiutions. The student population by income at the Ivies is largely bi-modal as a result in an effort to balance influence and diversity intitiatives.
2
Endowments are precious resources for institutions. They pay for faculty salaries, student organizations, financial aid, facilities and more. Why on earth does the NYtimes have such an axe to g
2
Are we waking up?
3
Teaching our children well?
5
They seek the truth before they can die.
2
What if the trillions held overseas are not as safe as people think they are? What if all the dollars the dark world seems to have to buy quarter-billion dollar palaces and penthouses is in fact the same dollars that Americans think is "safe" overseas? Where do these fools think the underworld gets all their dollars? How many child slave camp factories, slave occupied brothels, and slave camp construction sites do they think the underworld runs to make this endless supply of burnable dollars? Do they think its all from oil and gas?
5
Fake news, again, from the NYT. There is nothing new about blocker funds. Further, taking all legal steps to minimize one's taxes (tax avoidance) is--by definition--absolutely legal for individuals and corporations. Note the attempt to slime universities, whose investments are generally tax-free in any case, by suggesting that using blocker funds is somehow illegal and then transitioning to chastising universities for utilizing other legal tax breaks such as exemption from property taxes. Then, while the author was at it, she tossed in a slam against "controversial" or protest-worthy investments; I guess today was "assault universities" day.
1
The only ones paying taxes seems to be us "stupid" people.
11
Religion, education, health care...funny how these areas have come to believe and promote themselves just like any ole business, demanding special treatment and consideration, tax-exemptions, and more....while standing on their respective pedestals and proclaiming themselves as Necessary for the Good of the People, as Different Than Business, yet they're just bloated, profiteering, hypocrites....
just like Corporations!
What a farce America has become.
6
Couldn't go to one of these schools let alone see their financial representatives at the bank in the Caymans? Must be a serf. Shut up and await further instructions with everyone else.
3
The next time either my or my partner's universities send pleas for $$$ I will send a copy of this article. Nothing more.
10
This is typical Liberal hypocrisy--but essentially no more shameful than what Hollywood does--which is to support every Progressive cause--and then shoot their movies in places where unions are weak--and where they can wrangle the greatest tax advantage from local politicians. Or better yet...to support every Progressive cause, and then engage in the most egregious forms of sexual harassment and degradation to women. Or better yet...Apple's Tim Cook--uber Progressive--who parks billions overseas to avoid paying taxes.
Move on...nothing to see here folks...just Liberals being Liberals--saying one thing--and doing the exact opposite.
5
Like most liberals/leftists, these schools are the height of hypocrisy.
Pretending to stand for the workers and poor, these schools have amassed immense cash hoards while ripping students off with ever higher tuition while thousands of school administrators make massive, 6-figure salaries. Someone should look at the most liberal schools along with Columbia, like Berkeley to see how much they have hoarded, while its a public school it portrays itself as the center of liberal politics - but I'll bet it also has a huge endownment avoiding taxes.
That's how liberals operate; they want all the advantages while accepting no responsibilities.
2
All this degrades the value of a college diploma. More and more, young people are seeing that big educational institutions are corrupt at the top level. Learn about your interest online and go from there.
1
Honestly, what's the point of this article other than to stir up the anger among leftists on campuses?
Universities and colleges operate in the real world, despite what they often let their faculty teach. Deal with it.
1
Everything is a profit center.
How do you appeal to the elders to toss the moneychangers from the temple when the elders allowed the scheme to be organized and possibly suggested it in the first place ?
The investment money is blowing around like dandelion fluff.
1
There is a glaring moral disjunction in those who equate legality with morality, those who defend offshore investment strategies for anyone, including universities, as perfectly legal and therefore moral. We all know that there is the law and then there is the spirit of the law; that, as J. Edgar Hoover famously said: “Justice is merely incidental to law and order." Too many capitalist apologists use the concept of fiduciary responsibility as a window dressing to disguise what in reality is greed. If you live in the U.S. and use the American infrastructure, accumulate profit from the American market, or generate investment interest in the U.S. – you should pay taxes. End of story. Either that or everyone, including the person flipping burgers at McDonalds, should have the option of hiding some of their income offshore. Capitalism does not have a conscience. And it should be forced to recognize that there is a kind of profit other than financial profit. There is social profit, and it is expressed in what is called the social contract. This contract requires cooperation of all members of a society to work for the common good. Anything short of this – labeled variously as “meritocracy,” “self-reliance,” “free market,” or “fiduciary responsibility” – is morally bankrupt. An effective society is not built by individuals, but by collective effort. To blithely assert that the “nature” of capitalism to seek profit and that it has no other responsibility is to be socially blind.
8
Appalling...they GOP will go after this distasteful and disgusting practice, trying to look like a hero while student loan debt will not be addressed at all nor will the proposed tax breaks for the parents of the wealthy students attending these elite universities. Yes, it is time for a New Order and the same swamp in different clothes led by Trump and the GOP must be ended for good. Progressives must be ready to be of consequence when their opportunity comes.
4
That's great.
Maybe they can use some of that money to lower tuition?
LOL
8
Everything is so profoundly rigged. Every day another story. No one can fix it. Nothing is shocking anymore. Resistance is futile.
6
Remember when Gail Collins managed to work into each column the fact that MItt Romney strapped his dog to the roof of his car for a road trip? Ah, the good old days. Anyway, my version of Romney's dog is a certain mutt hanging out in the While House, an intellectual known as Jared Kushner. It's worth reminding everyone that despite a 20 billion dollar endowment, Harvard still thought it was important to admit the erudite Jared because his family would donate 2.5 million to the University. Veritas as we like to say around here..
8
Should of been “ intelligent “ to describe the President’s “ advisor “. What a joke , and we in the 99% have to smell the swamp.
Just another group of hidden, self righteous oligarchs stripping the country into financial oblivion. I cannot understand why thinking people would donate to a university which turns around and impoverishes its primary clients - students - while building tax-free asset sinks.
7
As as a deeply disappointed graduate of one of the named institutions, it is maddening that the leadership made choices made may be legal but clearly are not moral, and I will act.
If an action fails the transpency test - don't do it.
If an investment vehicle is entitled "Blocker" because it is a loop-hole that skirts the spirit of a fairly clear regulation - don't do it.
Short term gain should not outweigh a long term perspective.
My easy action is to shift this years donation. It will not take long to change the estate plan, and to reach out to classmates who I suspect will act appropriate to the behavior.
Direct outreach coming my (ex) dear alma mater.
3
Heaven forbid schools should find ways for their students to be able to pay for an education without going into debt for the rest of their lives. Did you actually think all that tuition money was really going toward education? If were a student attending one of these schools, I'd demand some answers today.
6
A portion of the earnings of the endowments contribute to the operations of the school, REDUCING TUITION! Further, tuition doesn't go to the endowment.
An "endowment" is meant to be be perpetual. The earnings are used to support the beneficiary of the endowment and to increase the endowment (i.e. increase future earnings). It is to the benefit of the school that the endowment's investments do as well as possible.
2
All tax-exempt non-profits (for instance, Cleveland Clinic) must file an IRS 990 report, which details their financial investments. When I worked in development I was amazed to see the amount of money, from the largest to the smallest charitable foundations, deposited in Cayman Island tax havens. Check out guidestar.org to research where your donations end up.
4
I’m regularly astonished at my decidedly working class relatives getting outraged at “welfare cheats” and folks who get disability payments they think they shouldn’t get—which amount to moving from dirt poor to just poor—but ignore the billions of dollars the already rich secret away from taxes. The working class needs to get woke.
10
This is a prime example of why there is so much frustration among ordinary Americans. What is good for the 1% (or future 1%) does not apply to everyone else. I commend the Time for bringing this to light.
7
Al Leona Helmsley said back in 1989, "We don't pay taxes. Only the little people pay taxes." Forever and ever, amen. The politicians and the plutocrats pull the wool over citizens' eyes while they, the citizens, follow last night's sports scores and worry about losing their jobs. I would venture that most don't even know who their congressman is. Perhaps that's how it should be. Income inequality will eventually lead to social unrest and revolution.
5
"Makes me so furious that I have decided no Apple products in my home."
Bad idea.
Suppose Apple stock is owned by investors all over the world, less than half of whom are Americans -- as often is the case with some indisputably "American" companies. If some foreign affiliate of "Apple" (Irish, let's say) makes a computer and sells it to a consumer in another foreign country (Kenya, let's say), where, exactly, is the "connection" between "Apple" and the US that warrants requiring Apple to pay US income tax?
Perhaps you would say "Well, Apple is an 'American company' and so it should pay US taxes -- even though the computer was made in Ireland and sold to a consumer in Kenya. But the inevitable result would be that a clearly "non-American" company (from France, say) would do exactly the same thing and you wouldn't be able to argue that the French company is "American." That would give the French company a leg up on Apple, which would be "tainted" by its American-ness -- even though its Irish affiliate and the Kenyan computer-buyer have no connection whatsoever to the US.
Perhaps you could say that US taxes would be payable only if one or more company directors are American. But if you say that, how long do you think it would be before Apple has no American directors -- five months, five weeks, five days, or five minutes?
Bottom line, the world does not revolve around the US. A company may be thought of as an "American company" but have no real connection with the US.
1
"What I say and what I do are two different things," remains the sentence that most stubbornly describes the essence of my post-grad years at a prestigious research university. It was uttered --- with an undisguised smirk --- by a recognized scholar and charming person who could make or break grad students' professional lives.
And did so with glee.
When we, shocked upon hearing the above statement, questioned its moral shortcomings, the Chairperson gave us a winning smile and asked:
"Why? What are you going to do? If you tell people what I've just said, will they believe you, a couple of students or me, a Distinguished Professor? "
I tell graduating students about this episode. Not to discourage them from going to this or that Great Grad School, but to prepare them for what, quite possibly, to expect.
3
It's not just endowments. What about foundations?
And check out what these people make...
5
The Eight Ivies are sitting on funds large enough to suspend all tuition for the next 50 years, all earned tax exempt. In addition, Federal "Grants" to these schools exceed the total tuition collected every year.
It's a scam. But they have friends in some very high places scattered throughout government. Payment, subsidized by the US Treasury, guaranteed up front, with no regard to the outcome.
Nice business model!
And try to find a plumber this afternoon to fix your sink.
10
The fact tnat much of this money that higher education is hiding from taxes is revenue obtained from American tax payers. Pell grants and government hand outs to these institution amounted to a gravy train. All of this on the backs of student loans and families. Total transparency must be the norm before any government hand outs to the ivory tower elite.
4
I’m feeling sick to my stomach as I️ continue to read these comments because they are all true.
4
The taxpayers don't directly fund the endowments.
No less than any individual citizen, a university exists within a society which created and nurtured it. If Daddy Warbucks must pay taxes to repair the roads his munitions trucks use, why not fair Harvard?
Perhaps because both, deep down, feel that they can make better use of “their” money. But here the university should part company with the profiteer. If universities ultimately value democratic institutions, evading the taxes enacted by a legitimate (albeit imperfect) democracy seems short-sighted, and even hypocritical.
“Do what I say, not what I do” swiftly becomes “Pay no attention to the man behind the curtain”!
7
I’m a former math professor who taught at Washington U. in St. Louis. From my vantage point, It is a sad statement for our society that this article is news at all, but I do hope that it will wake readers to paying much more careful attention to how universities operate.
Here are observations from two of our greatest thinkers about higher education. They point out the real threat from the “business” model of higher education.
“…This shift…to student consumerism is one of the two greatest reversals of direction in all the history of American higher education..” (Clark Kerr)
“…advantage can…be taken of [students] by unscrupulous instructors and institutions…The “wants” of students to which competing institutions, departments, and individual faculty members cater are quite different from the “needs” of students…” (From On Higher Education: The Academic Enterprise in an Era of Rising Student Consumerism, 1980, by David Riesman)
For a deep dive into the bowels of academe, see my blog, inside-higher-ed . There you will read tales of how the student as “consumer” model drives American higher education – down; and thus drives down American politics, society and all that is dependent upon an educated population.
This must be changed. With all of the money interests - from bankers to builders - that are now tied up with higher education, it will take an immense public effort to make that change. Readers can start by educating themselves.
7
While most commenters are focusing on the opaque methods that colleges use to manage their endowments, in my view the most outrageous information in this article is the obscenely large size of these endowments. Universities growing multi-billion dollar endowments while tuition shoots through the roof. Does anyone really think that Harvard needs 34 billion dollars set aside for a rainy day? And they have the nerve to call and beg for money from alumni.
5
Colleges and universities have been out of control for years. Soaring tuition well beyond costs, extravagant student centers, gargantuan sports stadiums, fraudulent athletic scholarships.. Ive been reading that the whole system is on the verge of collapse.
Every donation request from my university goes right in the trash.. And the requests come at least twice a week.
8
This article should at least explain why a tax-exempt corporation needs a blocker corporation for tax relief.
3
I bet that a closer look would reveal that many of these universities are victims of the scammers who advise on and set up the blocker corporations. They sell the illusion of financial sophistication and the promise of returns like those of Yale. But, like the hedge funds, they underperform while generating enormous fees for their administrators.
6
Yeah, the unethical, immoral, grinning, conniving, hypocrite attornies — doesn’t deserve a Capital A — who later boast about what they do while they think their excement does not stick.
When I attended Duke University my annual costs were about $3000 TOTAL for tuition, room and board. College costs have risen far faster than the general rate of inflation. Students and their parents have been suckered into borrowing heavily to pay for inflated costs at our "institutions of higher learning." Most of these schools are private, non-profit or public, taxpayer-supported. In either case, hard-working taxpayers are paying the bill for the tax breaks the private, non-profits get from donations from wealthy alumni, or directly from their state taxes. The same tax problem occurs with "non-profit" hospitals, nursing homes, foundations, churches, charities, etc. Federal and state tax laws shelter them from paying taxes, while allowing very rich people to write off "donations" at the expense of other taxpayers. One partial solution would be to replace the federal personal income tax with a small 1% or 2% federal tax on real estate, stocks, bonds, cash deposits, and luxuries, so that working-class taxpayers will no longer bear an unfair share of our federal tax burden. With my proposal, wealthy donors would truly be GIVING to the charities of their choice, not using their donations as a tax break.
5
So, wait a minute--before we use this as (another) stick to beat higher education with, I want to know, somebody tell me-- how many institutions are involved in this, because the number listed here is pretty small. We need more information. Also some understanding of the incredible competition for dwindling resources in higher education. I'm tired of hearing higher ed made the villain--though I have to admit, it does have a talent for not being its own best friend.
4
pick one, look into its financial perations, you'll find one...
higher ed is not the villain, the corporate take over, replete with rising costs and declining rigor, is.
1
it the article they mention 56 private universities with endowments of $1 billion or more. More than one per state, I would thank that is more than enough to warrant concerns.
2
Are you reading this, Donald Evans?
If so, I'll wager that you didn't have a clue that this fund was formed in the Cayman Islands.
Why was it? Simple -- as any lawyer who does this kind of work (I do) will tell you. Well, maybe not "simple," but standard operating procedure.
Tax-exempt investors in a fund (universities, for example) do not avoid taxes on the portion of their gains that comes from BORROWED money -- only on the portion that comes from what they actually invested. As a result, many funds that use LEVERAGE -- for example, that buy stocks on margin -- create an "off-shore" fund for tax-exempt US investors to invest in. Investors in off-shore funds do NOT have to pay income taxes on gains attributable to borrowed money (complicated story as to why that is, but that's how it is). So, for example, if a fund buys a $100 stock with $50 in investors' capital plus $50 on "margin" (very common), and later sells that stock for $200 (i.e. a $100 gain), a tax-exempt US investor that invests in the "domestic" fund would pay income tax on 1/2 of that gain (the half attributable to the "margin," or borrowed, money invested by the fund), whereas a university that invests in the "offshore" fund would pay no tax at all. Not surprisingly, universities prefer to pay no tax, rather than to pay tax on 1/2 of the gain. And so fund managers often set up "offshore" funds not only for honest-to-goodness foreigners, but also for tax-exempt US investors.
1
Much of the discontent voters made evident in the last election resulted from a justified feeling "the system" is both unfair and unaccountable. Returning taxes to their original function of only raising revenue, thus forcing politicians to take a stand by having to vote on functional subsidies of policies such as discussed in this article, would be a good start to reawakening Americans' faith in "the system."
If Congress genuinely wanted to reform the tax system, it would oppose its use for making policy. Taxes should be used to raise revenue, and that is all. If they want to support a policy, they should do so through legislation and appropriation, though if they did that, there would not be the loopholes and credit favors to grant potential campaign contributors. Also, they would have to vote on policies and, thus, be put in a position to be held politically accountable.
Americans resent the tax system because they view it as unfair. Make it just about raising revenue, treat all income the same, and everyone can fill out a one-page 1040 in minutes rather than hours. If Congress wants to subsidize 501 c3s, homeowner mortgages, people with children, users of solar power, tobacco growers, or any other group currently subsidized through the tax code, let them go on record and pass legislation granting the money. They should not be able to hide behind a pork-laden tax code so long and complex that I would bet not a single Member of Congress has actually read the whole thing.
5
This is worse than it appears. every contribution to a college or university is tax deductible, so that in itself reduces tax revenue. There should be an excise tax on the assets, not the income.
2
University endowments grow tax free, regardless of where the assets are held. The discussion of offshore trusts clouds the concern that certain endowments are fat and keep getting fatter at taxpayer expense, while students at those organizations are struggling with tuition.
This could be addressed by taxing endowments like foundations: retain tax exemption on investment returns but require that 5% of assets be distributed annually.
1
as with a free press gone to advocacy, the slide of colleges and universities away from free inquiry toward prior (approved) conclusion indicates strong guiding hands, one, home grown, is the "special interest," any position gained and defended against exposure and change...this chicanery with endowment funds. aka profit, by any means, will serve as a beacon example.
2
This is the reason why students are now considered customers, even at the K-12 level. Challenging students to learn is not important anymore. What is important is to keep them happy with easy grades and campus perks. In return, they gladly pay their tuition, in any way they can, with many graduating greatly in debt.
1
Universities and colleges also strain local resources. Their not-for-profit status allows them to sit on some of the most valuable land in communities, utilize infrastructure, and services while paying no local taxes. The citizens of cities but in particular small towns are left to pay for this. Meanwhile the schools continue to enlarge their footprints and take increasing amounts of land and buildings off the local tax roles.
2
Explain this to me. OK, investing in off shore blocker companies allow endowments to accrue tax free, but when the money is brought ashore, it is not subject to taxes because these are "non-profit" institutions of higher learning?
Seems like Congress should create tax free investment for wealthy and elite within the US to compete against the Cayman Islands, require full transparency, and then tax the money when it is withdrawn regardless of being non profit or for profit. While the money accumulates, if it is invested into programs that address the social determinants of health or medical research, then the tax rate is lowered to recognize the social benefits.
1
Many of these high wealth schools use their endowment income to provide scholarships and grants to their students. Last year Wellesley College gave almost 60 million in student scholarships. Their tuition model is based on income so wealthy families pay 100% of tuition while students from poor families pay very little. Middle class families like ours pay a tuition rate based on our ability to pay so our student received a sizeable need based scholarship which actually made Wellesley cheaper for us that an out of state public school. Their admission is need blind meaning your ability to pay has nothing to do with being accepted. While Wellesley and other colleges in that category do use their endowments for a variety of purposes...most use a majority of their endowment income to make the school affordable to lower and middle income families. In our case while tuition has been going up our family need based scholarship increased as much or more than the tuition increase...thus the tuition increase is a way of pushing more the college costs toward the wealthy as they are still paying full price. Maybe it would make more sense to require wealthly colleges to give a minimum percentage of endowment income toward student scholarships and if they fail to do that, then they would be subject to a tax. Seems strange to increase taxes on non-profit educational institutions while we are reducing taxes on high wealth companies. The proposed policy will only hurt students and families.
4
I would prefer that colleges and universities return to the priority of educating students, not trying to circumvent local, state and federal taxes. "Non-profit" means non-profit, not "use offshore investments to create a profit."
I believe Wellesley is the exception, not the rule among wealthy schools. https://www.nytimes.com/interactive/2017/01/18/upshot/some-colleges-have...
1
Colleges and large public pension funds also invest in hedge funds. Hedge funds buy American companies, fire workers, strip retirees benefits, outsource jobs to foreign companies and then pay favored tax rates on their gains.
It is a wonderful system.
I'm currently reading: "Glass House: The 1% Economy and the Shattering of the All-American Town", by Brian Alexander. Great read, very depressing. Lots of blame to go around, but no easy answers.
5
Given how the current, ill-advised "tax reform" plan may threaten university and college endowments, it makes even more sense now for these institutions to use legal means to protect their assets by shifting money offshore. The goal should not be earnings at all costs, such as through investments in fossil fuels, but I would like to see institutions of higher learning shielded from the vagaries of short-sighted, self-interested political machinations within our borders. In fact, maybe if the middle class, too, somehow found a way to start using these offshoring techniques, that would provide the motivation that those in power in D.C. need to actually reform and clean up the tax system, and adopt policies that make sense for all of us rather than just their pet donors and extremist base.
All the while all the while is middle class families pay full tuition and our kids can’t get loans or grants. We’re in for $250K....for the first degree and now helping with the second, another $40K. My income is used to pay for school. It would be awesome to put some of those earnings toward retirement......but I digress.
2
Endowment fiduciaries are obligated to take the long view. The practices described here are legal and intended to serve that very purpose. Students, who take the four-year view, have no accountability to the fund benificiaries, no duty to serve (beyond their own self-appointment), and in most cases I’ve read, are woefully ignorant of finance and fund management. The endowments described here are easy targets for intellectually lazy hit jobs - really just entertainment for readers of this space - because they involve the progressive bogeymen of investing, classism and (mostly) fossil fuels.
1
The self-righteous and largely displaced outrage generated by this article must be heartwarming to its author but does little to advance our understanding of higher education finance. And there are certainly enough examples of high salaries for football coaches, low salaries for adjunct faculty, increasing numbers of assistant vice presidents, and other questionable expenditures that the public in general and alumni in particular have an obligation to debate. But the jumble of toatally different topics in the article and kneejerk responses in the Comments section is truly depressing.
Take the statement that universities use "offshore strategies to swell their coffers", wording calculated to make this sound slightly shady. Boards of trustees generally have a fiduciary responsibility to manage funds, whether corporate or nonprofit, in the financial interest of the institution. if they just put the endowment in the bank I suppose Stephanie Saul would be writing about university failure to use it to generate funds for student aid, new buildings, or other vital needs. Some universities include social justice criteria in making investment choices, e.g., the move a generation to divest from holdings associated with South Africa or more recent efforts to shed investments associated with the Occupied Territories in Palestine. To the extent society presses universities to be more "business-like" investment decisions will center on return, not social justice. This is what you get.
32
If anything the revelation of such 'legal' off-shore investment instruments may cast the business model of American universities in doubt. The world knows plenty universities that are excellent and need not rely on the returns of endowment portfolios.
1
Never again will I donate a dime to any school of higher learning. Disgusting. Time to boycott - money talks! No money. No tuition. No support. Enough!
35
You don't need to boycott or stop giving money, just do some research on what and where the university is investing in.
1
A very very small group of universities hold most of the wealth --- 11% hold 74% of the wealth as stated in the article. Do not condemn all colleges and universities because you are turned-off by the investment practices of a few very wealthy places. Instead, find the schools who can actually do a great deal of good with your charitable gift, and there are many of those who do not have large endowments, who provide critical educational services to very needy students.
2
I agree! It's time to destroy all higher education so we can go backwards! I expect 3,000 up votes here!
These schools seem very hypocritical when their profs say tax the rich, but then the schools don't tell the profs how the schools are evading taxes.
25
When I attended Duke University my annual costs were about $3000 TOTAL for tuition, room and board. College costs have risen far faster than the general rate of inflation. Students and their parents have been suckered into borrowing heavily to pay for inflated costs at our "institutions of higher learning." Most of these schools are private, non-profit or public, taxpayer-supported. In either case, hard-working taxpayers are paying the bill for the tax breaks the private, non-profits get from donations from wealthy alumni, or directly from their state taxes. The same tax problem occurs with "non-profit" hospitals, nursing homes, foundations, churches, charities, etc. Federal and state tax laws shelter them from paying taxes, while allowing very rich people to write off "donations" at the expense of other taxpayers. One partial solution would be to replace the federal personal income tax with a small 1% or 2% federal tax on real estate, stocks, bonds, cash deposits, and luxuries, so that working-class taxpayers will no longer bear an unfair share of our federal tax burden. With my proposal, wealthy donors would truly be GIVING to the charities of their choice, not using their donations as a tax break. As the late, wealthy New York City hotel heiress Leona Helmsley once said, "Only the Little People pay taxes."
NO! Start tax reform now,
First: keep the existing tax code;
Second: add a surcharge of 10-20 cents to each dollar of tax on AGI (i.e., a surcharge enough to pay off the years deficit in 30 years at the current interest rates).
Third: Set Congress to work on reducing "tax expenditures".
Actually I work with a professor who gladly pay taxes, saying it proves he's successful. This from a man making 160,000 for 12 hours of teaching, tenured, no retirement age, and 0 publishing duties, sitting on a few committees blathering about committees. He says he is so overpaid he doesn't mind doing as they ask. Thus proving that only an overpaid person thinks it's OK to be overtaxed.
The more I like community colleges.
35
Agreed, but what happens when the community college has the same type problems and bloated payroll and sketchy ledgers ?
The one common in all this is unethical appointed administrators and officers.
There is no excuse for this. College tuition is rising at a higher rate than heatlh care and college debt is the next bubble to burst and threaten the economy. This debt is not just in the for profits as Obama would have you believe but for all those Harvard students who do not qualify for the assistance and major in some useless major (and we all know what they are). There is no honest reporting on how many of these professional self indulgent students actually get a job and are no longer living in their parents’ basement. What is more infuriating is that no one is covering this story, not even Fox. As a Tufts graduate, married to a Tufts graduate, and a father and father in law of two other Tufts graduates, I would like to know if my alma mater is part of the scam. I know Tufts runs fake, rigged alumni elections for their Board of Trustees. Why not cheat with money? Who better to entrust our children with learning ethics and giving hard earned money than entitled tenured elitists who work less than 20 hours a week and pontificate from the Hill
13
Regarding tenured professors working less than 20 hours a week, you are way of base (but perhaps Tufts is different). Most work more hours than that just on administrative work related to evaluating other faculty for tenure or promotion and writing letters in support of graduate and undergraduate students. Then there is actual teaching which goes far beyond the classroom and publishing and writing grant applications which is mainly how you get tenure. I worked 50-60 hours a week including over the summer in my career as a professor at a large top state university. Now how much administrators do for their large salaries is more debatable. I can't speak for them but I know department chairs work their tails off.
2
Yes: NYT, please list the names of the schools.
1
"Not even Fox" is covering this? I guess there really is no unbiased news source out there.
I want to know what Trump has to say about this!!
1
He wants to tax them! It is a big deal here is Massachusetts where there are many private colleges with gigantic endowments. They should either be taxed or demonstrate that they use a certain (larger) percentage towards tuition relief than they currently do, not just towards new athletic centers. A school cannot have a billion dollar endowment if they are using the money for the good of their students.
But clearly they stash their money overseas to get a greater return than in a US bank...just like any other fabulously wealthy individual.
3
What a perfect time to change the tax code, to deny the country even fewer funds.
People: If this tax bill passes, INCORPORATE. Starve this boneheaded administration of the funds it needs to operate. Make the country the latest in a series or Trump-run organizations to declare bankruptcy.
12
We can thank Congress for this sad state of affairs: Congress writes our federal tax code. When I attended Duke University my annual costs were about $3000 TOTAL for tuition, room and board. College costs have risen far faster than the general rate of inflation. Students and their parents have been suckered into borrowing heavily to pay for inflated costs at our "institutions of higher learning." Most of these schools are private, non-profit or public, taxpayer-supported. In either case, hard-working taxpayers are paying the bill for the tax breaks the private, non-profits get from donations from wealthy alumni, or directly from their state taxes. The same tax problem occurs with "non-profit" hospitals, nursing homes, foundations, churches, charities, etc. Federal and state tax laws shelter them from paying taxes, while allowing very rich people to write off "donations" at the expense of other taxpayers. One partial solution would be to replace the federal personal income tax with a small 1% or 2% federal tax on real estate, stocks, bonds, cash deposits, and luxuries, so that working-class taxpayers will no longer bear an unfair share of our federal tax burden. With my proposal, wealthy donors would truly be GIVING to the charities of their choice, not using their donations as a tax break. As the late, wealthy New York City hotel heiress Leona Helmsley once said, "Only the Little People pay taxes."
Are these wealthy institutions paying their local property taxes, etc? I doubt it.
It's time they stopped mooching off taxpayers. Taxpayers should not be supporting this wealthy institutions.
22
Congress writes our federal tax code. When I attended Duke University my annual costs were about $3000 TOTAL for tuition, room and board. College costs have risen far faster than the general rate of inflation. Students and their parents have been suckered into borrowing heavily to pay for inflated costs at our "institutions of higher learning." Most of these schools are private, non-profit or public, taxpayer-supported. In either case, hard-working taxpayers are paying the bill for the tax breaks the private, non-profits get from donations from wealthy alumni, or directly from their state taxes. The same tax problem occurs with "non-profit" hospitals, nursing homes, foundations, churches, charities, etc. Federal and state tax laws shelter them from paying taxes, while allowing very rich people to write off "donations" at the expense of other taxpayers. One partial solution would be to replace the federal personal income tax with a small 1% or 2% federal tax on real estate, stocks, bonds, cash deposits, and luxuries, so that working-class taxpayers will no longer bear an unfair share of our federal tax burden. With my proposal, wealthy donors would truly be GIVING to the charities of their choice, not using their donations as a tax break. As the late, wealthy New York City hotel heiress Leona Helmsley once said, "Only the Little People pay taxes."
Think Congress will also want to levy taxes on churches as well?
11
They should. They really should.
1: whatever TOTAL WW tax rate Amazon has should be applied to all in the segments Amazon operates in; the same for all other MNCs!
2: i have not and will not ‘give’ a penny to any NGO or ‘educational’ institution or other no -profit unless i know very CLEARLY EXACTLY HOW it spends > money is fungible.
3; just like many other businesses ALL ‘public’ service [police, education - high/ elem, churches-synagogues- mosques-temples etc] must be taxed.
4: ALL ‘non-profit’ entities that have a paid staff and spend any more than x% on staff and contractors [salaries/ benefits/ expenses] must be taxed as a business - this should apply to ‘professional associations’ such as AMA Nurses Teachers Engineers Police —
These elite schools of learning are teaching the same thing by example as the Trump University taught it's students. Great role models.
9
When is Congress going to change the tax code to eliminate tax avoidance schemes by companies, individuals, and yes, universities? If not now, when?
The universities are doubly troubling, since they already enjoy a tax-exempt status that shelters $ billions. Just to be clear, when they avoid paying tax on their billions in income, the rest of us taxpayers pay more. Leaving less money to pay the ever-increasing costs of tuition.
These scams are all degrading our respect for the law. If the big guys can get away with cheating, why not you and me?
13
Unfortunately, the author of this article knows very little about how university endowments invest and even less about ffshore finance.
The primary **legitimate** use of offshore financial centers, such as Bermuda or Cayman, is so that investors from different countries can invest in a project or fund together with low friction. Each investor can report zero taxes in Bermuda or Cayman, since these countries don't charge tax, and then of course must pay tax according to his/her own country's laws. Bermuda and Cayman have an entire ecosystem supporting such activity and it works well. If allows for global capital flows around the world. It's actually socially useful and important when used legitimately
And, I know this is briefly mentioned in the article, but UNIVERSITIES ARE TAX EXEMPT! This makes the whole article moot. They use offshore centers for convenience, to lower costs, for safety, and yes, to block UBTI, but this is completely transparent to everybody in the whole financial and there is nothing wrong with it. If you don't like universities being tax exempt, that is a very defensible public policy position. But offshore financial centers have nothing to do with it.
This article is like most of the "Paradise Papers" articles I've read - there is no illegal activity, just a lot of uninformed whining and virtue signaling by reporters who don't understand finance and reflexively hate rich people or institutions.
31
Perhaps if more Directors on Boards rather than leading the way to compete on proving their competitive wealth enhancement abilities, were, instead, student loan debtors, the corrective balance in points of view on leadership in higher education would be there. GWF: perhaps, rock hard reasons of wealth enhancement is not the primary duty of schools, their Boards, or, indeed, individuals.
Study in Humanities, indeed, teach care for humans.
Not so fast Mr. Righteous: This from a 5 year study by the IRS:
The audits identified some significant compliance issues at the colleges and universities examined,” said Lois Lerner, Director, Exempt Organizations division. “Because these issues may well be present elsewhere across the tax-exempt sector, all exempt organizations need to be aware of the importance of accurately reporting unrelated business income and providing appropriate executive compensation.”
The attached final report focuses on two primary areas within the examinations: reporting of unrelated business taxable income, and compensation, including, employment tax and retirement plan issues.
The sacred cow really needs to be a little less sacred.
2
The real question is why any university needs to sit on an endowment of billions of dollars? Why is it not being used to educate students? These elite schools have amazing facilities and resources already and still charge students exorbitant tuition. Something is upside down. Educational institutions as an investment vehicle is absurd from an educational perspective . Our society is spirally down in so many ways.
1
So the students suffer with student loan debt while universities inflate tuition fees & hoard money in tax shelters. Students should simply stop paying back student loans & let the government deal with it by going after these greedy “institutions of higher learning.”
12
It's because of things like this that I have stopped donating to my alma maters.
11
Can you take your reporting one step further? When were blocker investments first authorized by congress and who sponsored that legislation? I get a whiff of something like sulphur. Could it be that our tax code is made of nothing less and nothing more than the rich, cotton broadcloth shirts favored by the junior partners of major law firms?
8
Well, they're certainly not burying their earnings in salaries paid to adjunct professors.
27
I have paid personally far more in taxes than in savings. Had it not been for the taxes I would have atleast doubled my savings. And I have never received benefits. Am I happy about paying taxes? No. If I had a chance to avoid them would I take it? Absolutely yes . Unfortunately no such avenues exist for an employee . No offshore accounts for me. No tax havens for me.
So instead of blaming the universities and corporations close the loop holes. Won't happen lobbying 101. Welcome oligarchy ! Already here so no need for it.
5
This article plus the previous one on corporate offshore tax avoidance plus our overpaying for pharmaceuticals together represents an extremely large amount of money in the many hundreds of billions annually that could in theory eliminate the annual federal budget deficit.
I am rarely and amazingly somewhat speechless. I feel like the separation from the needs and desires of most Americans is so far away from what the government allows and corporations do that my mind is truly staggered. I have always been somewhat of a fierce optimist about our country and its potential future but I am starting to lose some faith at this point. Are "We the people" as helpless as it seems?
13
The solution is to define ‘tevenue’ as the taxable base. Set tax rates based on ‘category’ of the sale - lower rate for food and medical care, a higher rate for hotel stays - progressively higher rate for more expensive hitels, etc.
ABSOLUTELY NO EXCLUSIONS - no exemptions deductions exclusions . No charitable contribution no morrgage no interest no home insursnce etc. No medical expenses no casualty no state tax no property tax.
DO NOT mix tax policy with social policy. Arrange SEPARATE welfare system for those in need.
No dependent exemptions > why should one who has no dependents ‘pay for’ those who choose to have many.
No business expense - why should a frugal business subsidize an extravagant/ wasteful one.
Do this and set a base of 1% tax on the first dollar up to $50k. Them rising at 5% for each additional 50k - so $50k-100k is taxed at 6%, 100-150k at 11%, 150-200k at 16% etc. up to a max rate of 75%,
If the President and Congress genuinely wanted to reform the tax system, they would oppose its use for making policy. Taxes should be used to raise revenue, and that is all. If they want to support a policy, they should do so through legislation and appropriation. Of course if they did that, there would not be all the loopholes and credit favors to grant to potential campaign contributors. In addition, they would have to vote on policies and, thus, be put in a position to be held politically accountable.
Most Americans resent the tax system because they view it as unfair. Make it just about raising revenue, treat all income the same, and everyone can fill out a one-page 1040 in minutes rather than hours. If Congress wants to subsidize 501 c3s, mortgage-holding homeowners, people with children, users of solar power, tobacco growers, or any other group currently subsidized through the tax code, let them go on record and pass legislation granting the money. They should not be able to hide behind a pork-laden tax code so long and complex that I would bet not a single Member of Congress has actually read the whole thing.
Much of the discontent voters made evident in the last election resulted from a justified feeling "the system" is both unfair and unaccountable. Returning taxes to their original function of raising revenue, and forcing politicians to take a stand by having to vote on functional subsidies would be a good start to reawakening Americans' faith in "the system."
8
Universities and hospitals are businesses under the guise of “non profit” organizations. They don’t have profit but they have growth of assets. The salaries of university presidents have grown like those of CEOs of businesses. I am not surprised that they use offshore tax havens.
But as businesses, universities and hospitals are very inefficient businesses. They have huge infrastructure baggage that add high cost to their services. And they have large debts based on the assumption that their revenue is guaranteed. I am hoping, one day they will be disrupted by a Uber-like organization that connect those who have the knowledge and skills with those who seek them. A much more efficient and less expensive way to provide education and healthcare. It is a great opportunity for entrepreneurs.
6
Great points. If I may be so bold as to offer one possible disruption, right now the university system holds a monopoly on the granting of degrees. Thus, they control the "union card" that allows you to apply for any white collar job. If it were to become illegal (and it may very well be unconstitutional anyway) to discriminate in employment based on possession of a degree, the bubble would burst overnight, and the marketplace and the internet would quickly offer Uber style ways of acquiring actual skills.
1
The heart of the academic enterprise , students and most faculty, see none of this wealth. In many non-elite but good colleges and universities people struggle to educate and learn and pay more and earn less while the financial strength of the country is siphoned into corporate machinations the serve only the very wealthy while the rest see less and less of the fruits of their labors. Tragic
Endowments aren't "booming" as long as I can line up the twenty richest individuals and households in the US side by side with the twenty richest universities and note that the individual is richer is always richer than the corresponding university, or as long as the US has only about eighty universities and colleges with endowments of $1B or more while the "poorest" individual in the Forbes 400 is worth $1.5B. I deplore offshore tax shelters for universities even more than for the reprehensible individuals who develop and use them, and will never give a dollar to any school that I learn has exploited such tactics. But I also trust universities, and non-profits in general, to do a far better job deploying their resources for the general good. Nor can I see that taxing "high" salaries in private universities, but not public institutions (where top coaches often make $1m per year and up), in order to fund tax cuts for individual billionaires, can have any purpose other than to impede the mission of wealthy universities to pursue the truths of science, economics, history, and so on that the GOP finds so offensively "inconvenient" to their counterfactual ideology. After all, only very wealthy universities can undertake the research that the current administration will no longer fund among its own qualified researchers.
1
The faux populism of this article is quite something, and not well-reported. The university endowments are investing as limited partners or other minority investors in business entities established by others under typical business arrangements used by those firms. The endowments are not controlling owners or receiving "unrelated business income" (compare NYU, controlling shareholder of Mueller's Noodles which triggered the tax law change in the late 1960s). PE firms use off-shore entities; US tax law gives them incentives to do that -- change the law, by all means, but until then, investors in PE ventures are obliged to follow. The suspicions raised in this article look to be smoke without substance. As really a separate point is the exclusion from tax of income from endowment for education institutions, a target in the current tax bill. Yes, Universities receive a tax break on endowment income, but that's because the income supports a venture in the public interest -- education and research. The best-endowed institutions also provide the greatest financial aid. It is cheaper, out of pocket, for a needy student to go to Harvard than to many public universities. US research universities are a crown jewel, drawing students from all over the world, conducting a huge amount of basic research in the sciences and other fields.
9
And so it goes. The poor cannot escape poverty, but the rich grow ever richer. The middle class once sent sizeable numbers to these so-called selective institutions, but not anymore.
These are the institutions which we trust to treat the applications from our sons and daughters fairly. These are the institutions which we ask our young people to trust with their hopes and futures. But what do they do?
They avoid scrutiny and taxes by making secret offshore investments, apparently well aware that avoiding taxes or investing in the petrochemical industry violate the wishes and values of the pertinent communities.
These universities draw 60% or more of their students from the richest 1% or 5% of families. Fully 60% of the children from the richest 1% of American families attend those institutions.
This is worse than unethical because it is happening at revered institutions whose missions include the pursuit of knowledge and shepherding the idealism and futures of our young people. Both private and public institutions operate under the presumption however misguided that they are serving the common good.
It is puzzling to me that we continue to esteem these schools at all. They behave like white collar criminals. Admissions are not fair. Who believes the rich are innately superior? Deserving middle class students are rarely admitted, though there are always places for mediocre students who are also very rich, like Mr. Kushner.
7
These techniques of blocker corporations for private equity investments have been around more than a decade, and are well known. They help the institutions to invest in a broader range of funds and help them diversify.
Stepping back, the question really should be why Congress set up these schools as a tax-free entity with tax-free investing. Overtime it is understable that they would accumulate a lot of wealth. Now that the schools have done so, why does Congress want to cut them back?
Don't these universities help educate the young, foster innovation and fuel job creation? Aren't they connected with new enterprises and startups? Aren't our universities bet in the world?
In a way we have heavily subsidized our universities the way China has subsidized its industries. Now Congress wants to kill the goose that laid the golden egg? Is it because Universities are too liberal, perhaps? Or too rich?
2
Let’s hold them accountable not just assume so .
How much more do we need to see before we realize just how much the current financial and tax system in the US is tilted toward the rich and influential? The average citizen is lucky to get a tax break for their meager charitable contribution, while the 1% avoid taxes, and pass that avoidance onto the "average Joe." It is a system that President Trump has used his whole life, laughing as you and I struggle to just get by....
16
Disgusting! I see Duke University on the list of tax avoiders. The rich get richer is so true.
4
Duke University is tax-exempt, just like all other US universities. They are not avoiding any tax
1
You mean the endowments that allow Ivy League and other leading academic institutions to be among the LEAST expensive for students to attend, due to generous financial aid?
Putting aside the nefarious practice of tax evasion, let's not get wrapped up in outdated notions of these schools only permitting the wealthy elite to attend. Harvard, Yale, Stanford, etc are actually more affordable, and are available to a more economically diverse population than less prestigious (but often no lesser in quality) schools, precisely because they have large endowments.
Yes, close off these financial subterfuges, but don't demonize endowments as a "one-percenter" privilege. They have actually been widely applied to benefit the lower 80%
21
The actual demographics at most of these schools is as follows: 60% of their students come from the richest 1% or 5% of American families. 60% of the children in the richest 1% of American families attend these schools. Once upon a time they had a fair number of middle class students but not anymore. Who cares if these schools are affordable? There are very few working or middle class students left. One would think the rich were innately superior to the rest of us.
1
I feel sorry for all the suckers err alumni who continue to donate to these universities.
3
Pinky,
I highly recommend that you read the comment from Mike of Lexington, MA. These universities are largely using their money to subsidize needy students.
Think how many more needy students these universities could support if they used money from these obscene endowments.
Makes me so furious that I have decided no Apple products in my home. #No-more-Apple
2
It’s wonderful that all of this is being revealed, like an early Christmas present, but what are/can we do about it? We are powerless against big business, big government and now big college. We are all suckers footing the bill that the “bigs” continues to dodge...
4
I wish I earned enough money to have a tax lawyer. I must be the only tax-paying chump in this country
6
I’m sure they may feel it’s “divine deception”. Like big business the attitude is “do what we want and sort it out if there’s a problem” and also the “he who has the most money will win”. Every large institution increasingly seems corrupt.
4
Dartmouth, Columbia..probably the entire Ivy League is involved in this junk not intelligent not educated offshore slime. Yet more evidence that shows the over-rated rank/prestige of The Ivy League. This should be very concerning for the USA Economy. The Ivy League is not the highly intelligent education product is claims to be. ---- There is a big world out there. Is there a superior School System to the Ivy League, that gets the best and brightest of employees and students? There very well could be. And I am sure this superior School System, does not "offshore their brains", like The Ivy League does. Offshore is not a strategy, it is a lobotomy, and eventually a bank account one.
You are right. There are world-class universities off the Anglo-American radar screen. Take the Grandes Ecoles or universities and engineering schools in Switzerland, Sweden and Germany as examples.
Unfortunately Peter, I am right. Thank you for reminding the Ivy League that "they are only on top in the USA" and that there is a world out there, with other Schools... very prestigious ones too. And, of course, there certainly looks like there is plenty of room, for NEW to happen. A new School System to be on Top of the USA School System, and thus, lower the Ivy League. But, it looks like the Ivy League has lowered itself, with their own poorly educated, lower intelligence offshore slime trashy decisions.
And the tuition keeps going up and up and up!!!
5
Non-profits are a big joke. A license to pay huge salaries and benefits while evading all taxes including state, local and property taxes. Public school teachers have their salaries published but public non profits tell you its none of your business. I look forward to more stories of “legal” tax avoidance around the world. None of these has been addressed by the latest tax reduction package. When will Congress start hearings?
7
Our elites creating another odious mess.
1
And for all that money they don't even want to pay or hire professors. The greed at every possible level is so disgusting. Colleges should not be about making big money or putting future generations in debt. God save our children.....
2
OR about professors publishing!! That is the biggest farce ever! The last thing higher education cares about is the students.
1
So, as you can see, there's a reason most officials are lawyers, and you can also see that they right laws that benefit the rich, at the expense of everyone else. Like this article saying they're not cheating, yes they are. A law we written to not only allow them to do so, but add the cost as a subsidy, and you know who pays for that. Why, oh why don't people wake up and throw these bums out and demand change that finally benefits the average Jane and Joe?
1
It's true that this looks bad but if they pay the appropriate income tax on the taxable portion of their income then what's the problem? Can't they do whatever they want with their money?
Now if there is a ever a revolution in one of these hincky place and we wind out with let's say the People's Republican of the Cayman Islands then kiss this money goodbye, like what happened to the money that people parked in Cuba.
2
Is anyone surprised? Colleges are higher learning but are not ironically a higher level of ethical business consciousness. Large universities are into real estate exploitation to the detriment of communities as evidenced in NY. And we know that real estate bullies can be
international money cons and tax evaders don’t we?
1
There's a steady drumbeat for not-for-profits to be more businesslike.
Be careful what you wish for.
2
Most of the money generated by endowments supports financial aid for middle-class and poor students, as well as research and university infrastructure. If you tax universities, you are only hurting college students.
4
Endowments contribute minimally. Most is underwritten by the federal tax payer through student loans and, importantly, research grants that do not only pay for the research including the salaries of professors, lab techs, postdocs and graduate students, but also allow the hosting universities hefty indirect cost recovery. Hopkins, for example, attracts a billion dollars per year in federal research funding.
4
Private universities should not be tax exempt. All undeclared/nondisclosed foreign funds should be subject to seizure and forfeiture. Solved.
1
Gross. More systematic lifting of one group of people--the people who need it the least--which results in the systematic oppression of others.
2
It's time to start a discussion about Academic Privilege. Higher education is riddled with economic inequality. The research faculty is put ahead of the teaching faculty, many of whom work for less than minimum wage. People accuse higher education of having a liberal bias, but I can't find anything liberal whatsoever about the adjunct professor situation. It's more like something out of Dickens.
18
It's straight out of the corporate America playbook. Contract workers now the norm in corporate America! No benefits, no vacation. Hourly wages or nothing at all! Ask me how I know!
1
EXACTLY!!
I work in this bubble (as a broke graduate student), but even I am looking forward to when it pops. We're all being conned.
12
The president of the University of Virginia received at $754,830.- per annum the highest compensation package of any academic employee of the Commonwealth in 2016-2017.
source: http://www.dailyprogress.com/news/local/deans-doctors-among-highest-paid...
The state pays her only the base salary as social science professor, roughly $175,000.-. Reading this article we may wonder where the rest flows from.
5
This sort of thing is why US tax reform is so essential.
5
Just imagine what the 'great' US of A could do with all the taxes collected on these offshore accounts. We could lower the cost of education, get great health care(maybe), replace infrastructure that is crumbling, pay off the debt, feed and house the homeless. The list is endless. Bottom line. Money. Greed. And they are one and the same. What is mine is mine. Incredible. There should be a law.....
5
Bottom line - the tax code needs to be fixed.
2
The reporting here is wrong, at least in part. The use of offshore funds by tax-exempts is longstanding, not at all unusual. It results from the anomalous treatment of tax-exempt entities like endowments under US tax laws and regulations of investments in pass-thru entities that incur debt, which most businesses do. When the debt is incurred by a pass-thru like a partnership, the debt is attributed to the investors and returns attributed to such debt are treated as "unrelated business taxable income" to the tax-exempt investor even though it was incurred by the business. That income is subject to income tax -- while the identical investment in a business organized as a corporation, whether US or foreign, is not. I usually commend the Times for its investigative reporting, but this time you got it totally wrong.
7
The one healthy thing about all these revelations is that students and other young people get a chance to see how America really works, as opposed to the fantasy world that’s promoted in many classrooms.
1
The president of my alma mater just sent out mail asking me to write letters to my Congressmen to get rid of the 1.4% tax in the new tax bill. I asked him if the school uses blocker corporations for its endowment.
He hasn't replied yet.
I'm thinking, time to cut off that monthly automatic donation to the old school...
3
I am not surprised. In the late 80's there was a national movement by GOP members of various college and university governing bodies to force the institutions they manage to 'adopt a business model'. I guess because education is better viewed as a 'business' and faculty and staff 'employees'. Then came the push do disallow faculty to unionize because faculty are really, get this, 'part of management'. Then came the effort to recruit students from abroad because the US college cohort was (and is) declining. Gotta fill thos dorms or tear 'em down so local realtors and builders can put up apartment blocks to further add to the student loan crisis. So yes folks, universities and colleges are indeed businesses and, unless they give all of their endowment income to students for tuition and fees scholarships, it should be taxed, at the corporate rate.
3
I escaped poverty with a good inexpensive state college education. Hearing about university endowments protected and hidden in offshore companies makes me ill. Why don't they use their offshore wealth to make life easier for poor kids trying to make something of themselves?
9
I suppose the unifying vision for colleges as well as individuals must be keeping even more money for ourselves because we know we deserve it.
2
There is a difference between what non-profit educational institutions do with their endowments, and what private individuals or for-profit corporations do with profits. Universities don't use money to buy yachts, jewelry, vacation homes, designer handbags, or luxury holidays. They do overpay their administrators, but on the whole, most of the money funds the educations of students who would not otherwise be able to attend. This should not be overlooked.
Do we want an educated populace or not? If we do, then why make it harder for kids to get an education by cutting into the endowments that provide their scholarships and grants?
Republicans prefer an uneducated populace, because those are the folks who vote Republican. So this new tax scheme makes me wonder if they are trying to build their base by denying educations to as many people as they can.
8
If I recall correctly the president of Stanford has use of a yacht, and most have the use of a nice home for free.
1
The real story here is that if you add up all the money that is placed overseas to avoid taxes, it will prove to be an amount of cash that significantly increases the tax burden of low earners. Low earners can't afford offshore accounts and other loopholes that require the help of lawyers. When they do cheat on taxes, the amount is insignificant compared to what old money and businesses are able to hide. Now does anybody here think that the republican plan to lower taxes on the rich and on corporations will lead to a change in this area? My guess is that if they get a tax break on top of the tax avoidance, they will venture into even more areas, since the lower classes are making way too much money, money that they feel they should have access to, since they know best how to spend it.
3
Colleges and universities have become no different than profit making corporations and are veiled as 'non profit' institutions. They make tons of money through ridiculously high tuition give some scholarships to athletes who in turn make the institutions billions through their sports programs. And then of course these institutions pay no tax because of their non profit status and students graduate with huge outstanding student loans. Education in this country should be free rather than allowing these educational institutions and their management to make millions.
1
It is quite a civics lessons to learn how our institutions of higher learning, so called, are demonstrating where their true commitments lie -- not in advancing the greater or pubic good or furthering the idea of the commons, but shipping the greens overseas to avoid taxes. Goodbye, Mr. Chips.
2
Between the recurring money scandals involving college athletic programs and this latest revelation about their endowment participation in off-shore tax avoidance schemes, there is something disturbingly corrupting that is taking place today on some American campuses, and it all evolves around maximizing earnings, whatever the ethical costs. Are these places institutions of higher learning or mere corporate-like entities to make head coaches, presidents, and their respective staffs very well off, indeed?
Principled parents and their college-applying children may want to do some additional research into whether those schools being considered for application have been engaging in this troubling behavior.
1
Bravo, Brian from Philadelphia. Well said. This article is largely misinformed.
The use of so called blockers is common and well known. It's impact is to allow tax exempt investors a legal way to employ leverage in their investment portfolios. If you make the use of blockers illegal, it is very likely that the tax exempt investors will not make these investments because the tax that would be owed will make the returns they will earn uncompetitive. Thus you will reduce investment returns for the tax exempts and not raise any revenue for the government.
Who are these tax exempt investors employing blockers? University endowments, charitable organizations and pension plans, all US based. This doesn't seem like the list of bad guys we ought to be focused on at the moment. Outlawing blockers will hurt people that depend on these organizations in one way or another.
1
You are advocating trickle-down theory, which has never, not once, been shown to work.
1
I agree with Brian of Philadelphia; this is not news at all, but a common and perfectly legal strategy.
Also, endowments are tax exempt entities, so what taxes are they avoiding by investing through a Cayman Islands company anyway? None. This is outrage over absolutely nothing.
42
Isn't the outrage that they have been hiding their money and claiming larger expenses to charge higher tuition ?
5
Read the section of the article "Tax 'Blockers,'" which explains it:
"When schools earn income from enterprises unrelated to their core educational missions, they can be required to pay a tax that was intended to prevent nonprofits from competing unfairly with for-profit businesses."
1
Common and perfectly legal. Yes, on their clients' dime (and trillions), the wealth defense industry has prodded and instructed the same clients' political representatives to write the laws and loopholes that create and empower these "legal" practices. Thanks to this the wealthy can "legally" have their cake and eat it too. Oh, and rub it in everyone else's face, i.e., prod politicians and hire pundits to shamelessly tell us that these folks are just following the law. Like any sophist worth his salt, they are secure in knowing that if you pay enough somebodies to say something enough, the unthinking and unknowing will nod along. But all this sophistry and misdirection makes nothing ethical, RB. Sophistry makes nothing just or moral. Commonplace corruption is not nothing, RB, but it is news.
2
There are times I becomes sad because what idealism I may have or want to have is treated with disdain but a person or institution I admire. Colleges are very important to me and I want to believe college administrators and faculty are as a whole driven by a social conscience. This article is fine and important, but saddening.
7
Remember this article is not about the behavior of higher ed as a whole but, instead, about how extreme wealth is handled and hidden. There are many, many universities that deliver amazing education without the "burden" of wealth.
Be wary of those who turn this issue into outright education bashing--those people have an agenda detatched from reality.
The good colleges and universities out there *are* critical to the future of this nation, and need us to stand by them.
More than saddening, it's sicking. But welcome to the real world where Congress not only knows the score, but wrote it.
1
Hate to go against the tide of outrage here, but offshore entities to 'block" taxes are a common and well-known structure, used by thousands of funds worldwide for many, many years. They are not limited to the U.S., and we did not need the Paradise Papers to reveal them (look them up with a simple search on Google). You don't need to be ultra-rich to use them either.
This is reporting what is easily known as if it is some kind of big scoop, to fan the flames of self-righteous outrage. Do the right thing? If you are a fiduciary on an investment committee for an endowment doing the right thing is acting within acceptable, longstanding laws to maximize returns after taxes. Those returns benefit low-income and other students in big ways. So this is not a rich against poor story either. Nothing sleazy about this folks; let's stem the outrage.
122
I agree with you, Brian. At first, I was outraged, because I am a university brat, and I'd had idealistic notions of academia for a long time. But you're right. And the Academy is a hungry beast, and if sheltering endowments legally is what they're doing, so be it. The qualify of staff and the curricula they teach is the most important factor.
2
But Brian, where did these loopholes come from? It doesn't take a genius to see them. You can be sure there didn't slip accidentally into the laws, Obviously there were put there precisely so that they could be used to avoid taxes by the Rich and powerful.
This is really a centuries old situation. In "Wealth and Democracy." Kevin Phillips points out that there is a feedback in economic distribution because as the rich get richer, they use their wealth to get more power. They then use their power to get more wealth and so on.
In feudal times, nobles kept an army of thugs called knights to extort money from the peasants and merchants. They then used the money to hire more knights.
Today, the Rich use their money to buy politicians who then pass laws and appoint judges who get more money to the Rich. Rinse and repeat,
There seems to be a tipping point where this process becomes impossible to reverse. When inequality becomes bad enough, the country soon goes down the tubes. He gives several examples, e.g. the 18th century decline of the Dutch Republic. Chrystia Freeland used 14th century Venice to illustrate this process in a Times article, but history is replete with other examples.
According to Phillips, the great success of America has been that before the tipping point was reached, something has always happened that reverse the flow of money upwards, e.g. the rise of unions, FDR's reforms.
Will that happen this time?
9
The Paradise Papers leak is showing us who the owners, investors, and beneficiaries of all these tax avoidance schemes are. That is not available via a "simple search on Google."
9
Imagine the money this country would have if corporations, universities, churches, the ultra-rich, etc. were all stripped of these gimmicks by which they pay little or no taxes.
78
Maybe the religions would disappear without the non profit status and tax breaks.
3
Or imagine the money the feds would have if they just took all income from everyone, and then distributed some small share back (to some of us).
1
@Bob,
Right, that's exactly the same thing. /eyeroll/
1
The Academic Industrial Complex . . .
26
Eisenhower did not only foresee the military-industrial complex in his farewell address, but also foresaw the government-academic complex. His is such an insightful address. Why would not he do anything preemptive during his presidency, if he saw this coming.
Academia is yet another institution that has gotten corrupt and out-of-control. Trump is the symptom of more than one disease, but the biggest of which is our national erosion of civic virtue, and the corruption of nearly every pillar of our society by monied interests.
33
We can't blame this on Trump. This has been in place for some time.
2
All these stories just make me head spin and my heart sick. What has happened to the idea of paying one's fair share? Of duty and loyalty to country? Greed. Pure, dumb greed.
18
Students should definitely rebel and protest these school's administration and Presidents. These "elite" schools constantly increase their tuition on the grounds that they need money. But the students that go to these colleges except for a few "tokens" won't care. Instead they will probably want in on the deals or learn how to get away with not paying taxes. The students at other colleges should care, these "elite" schools are above water financially while their colleges are drowning. This is how corruption, though legal because the law was written by the scammers, indirectly affects everyone.
71
The adjuncts should rebel as well. PhDs working for pittance, so the board can hide all the money in the Caymans.
1
Business should be taxed on income (perhaps 8%) but not on their net wealth. Nonprofits and trusts should be taxed on net wealth (perhaps 2%) but not on income. That would prevent charities from becoming investment banks and encourage all U.S. charities to repatriate income to the U.S. and eliminate any need for tax havens. Individual business owners should have a choice of paired wealth|income tax rates: 28|0, 26|0.2, 24|0.4, 22|0.6, 20|0.8, 18|1, 16|1.2, 14|1.4, 12|1.6, 10|1.8, 8|2. Tax reform needs to be fair to rich, fair to poor, and fair to nonprofits and trusts.
1
It seems fruitless for us to rail against the politicians and tax code. Change is difficult and slow. I hope the students of these schools push back intelligently and hard. University students have helped to change many things, here’s a blatant inequity they can protest across party lines. Perhaps those wealthy donors to schools are another target, why are they giving endowment funds that clearly aren’t needed?
For me, tax everyone and everything unless it’s a public institution. Churches, charities, private schools — tax them all.
10
One problem here is that Indiana University, for example, is a public institution, and yet it is being run as a business, like private universities.
You do realize that these institutions are with limited exemptions, tax exempt charities, and they're doing this to provide more support for education and research, something that we should all appreciate.
Further, these institutions have fiduciary responsibilities to the Board of Trustees the colleges themselves, the donors, the faculty, and students.
Last, this is old news. For example Harvard endowment posts its strategy on the web every year. Maybe the Times could learn how to Google, and this wouldn't be a problem.
13
Jamie, look into the pay scales, benefits and work hours of the adjunct professors who do most of the educating in universities these days. These large endowments are not really being used to support education. If they were, then adjuncts would get livable wages and health care and so on.
1
Don’t forget they are also doing it for the football program. Priorities, priorities.
2
Wait, nothing to get Times readers all riled up about?
UNIVERSITIES Are referred to as Institutions of Higher Learning for a reason. They are meant to form good character in those who attend them. The financial skulduggery and dirty deals described here are precisely the opposite of what higher education was intended to do--to inculcate morality, ethics and duty to serve others through leading by example. Slimy tactics such as hiding funds abroad in secret accounts to increase the endowments run directly contrary to the ethics and morality that are the primary objectives of higher education, which is meant to contribute positively to human knowledge--not to degrade the humanity of its graduates and staff.
89
The investments aren't hidden in the sense of not reporting them (i.e. pretending not to have it, like is the case with some individuals and/or businesses). It's not all that much different, from a hidden-or-not perspective than creating an LLC for a house you own and rent out to others.
Boy, today's kids go to 'college' to protest, not to get an education. That's why there are so many fools roaming around these days.
3
Nauseating. "Blocker corporations?" Just who is being "blocked?" The taxing authorities and the rest of us suckers who pay our taxes and don't have so many Congressionally-gifted loopholes to play with.
36
Mr. Mueller needs to investigate these ultra-right wing colleges and their ties to trump and Putin.
5
We guess you missed the Nov 5 Paradise Paper article w/ links to Trump/Putin etc etc - again, the link back to the Series of Articles is on the front page, under the intro to this article.
2
Dartmouth College and Columbia are certainly not far right institutions. About as far left a they come.
When their vested interests are at stake, faculties are hardly ever liberal.
Is there an honest institution left in the United States?
47
None of this is illegal. The US can’t control other countries’ tax rules.
Given those two statements why is this news?
I mean it’s a given assumption for me at least that everybody, as in everybody who pays taxes reguardless of if they’re making 35,000$ or 35 million dollars, tries to take advantage of every tax break and loop hole they can.
That rich people can pay accountant-lawyers to do it for them doesn’t bother me.
More over nothing changed after the Panama Papers.
Why is the NYTs devoting so many resources to covering this non-story?
5
It's a story because most people are not aware of just how many wealthy institutions and individuals pay little or no tax thanks to laws written on their behalf. Meanwhile the rest of us are left to pick up the slack.
27
It is an important story for those of us who care about fairness.
10
I'd rather these endowments have more money than the US Federal government. I'm pretty sure the money that would be collected in taxes would not be spent on making sure more students got financial aid to go to these schools or research grants to professors who can't get funded otherwise.
How come the more I read of this sort of avoidance, the more I feel that the U.S. is going the way of Venezuela?
27
This does call for simplified tax code and also perhaps lowering tax burdens on everyone because who doesn’t like to get fat rich? However that is the real dilemma! Should we accept the fact that we are inherently greedy as proven by the very fact that these institutions which are supposedly paragon of virtues are defaulting and exhibiting extravagant greed!?
So what is a normal person to do? Become corrupt? Start robbing banks? Take up anarchy? This is a shameful behavior for us Americans and demonstrates our capitalist foibles.
8
You get the sense from the newspapers' controlled and obviously strategic release of stolen personal information that only people the newspapers don't like, or think will generate the most outrage, use offshore accounts and tax shelters.
The simple fact is that wealthy people worldwide -- of all political stripes, in all industries, and supportive of all causes -- use the same tools to protect their wealth.
I will be less skeptical of this whole exercise when I see the wealthy US owners of the leaking newspapers, wealthy members of the political left, and wealthy supporters of popular left-wing causes being fingered, along with the current tiny selection of politicians, businesspersons and philanthropists generally associated with the right.
I generally lean left in my views and sympathies, but I deplore the arbitrary use of power and information, no matter who does it or for what cause.
12
So you missed the article 2 days earlier in NYT about another aspect of the Paradise Papers leak? A link back is on the front page, right under this article. Ta
2
the entire series of articles covers the spectrum of people, gov'ts, institutions hiding cash, funding all kinds of activities
2
Sometimes the curtain needs to be ripped away even if it breaks some of the curtain rod loops. Sunlight is the ultimate disinfectant.
“They’re not cheating. They’re not hiding money or disguising money,” said Samuel Brunson, a law professor at Loyola University Chicago who has studied endowment taxation.
This statement ignores that the entire tax code has been rigged to cheat the Treasury. It's not only what's illegal, it's what is legal that is disgusting.
58
Perhaps what is disgusting is not what is legal, but those who make it legal. That would be your elected representatives (joke there) in Congress. Remember, Frankenstein is not the monster, but the creator of the monster. Same with tax laws and loopholes.
2
Meanwhile, payments on gigantic student loans mean that many college graduates cannot buy cars, or homes or marry and provide for children.
29
The endowments are offered up by graduates who could easily fund scholarships if they chose to do so.
Endowments have nothing to do with tuition.
Why would a student loan payment cause someone to not be able to marry?
The Educational Industrial Complex now joins the Big Pharma Industrial Complex and the Military Industrial Complex. Fat Cats who buy their influence on Capital Hill, inside the Beltway, to juice their own coffers for their own self interest. Rome is certainly burning.
36
Not only do colleges send their money out of the country but they make the poor and the middle class pay for the services they need. Yale, with its huge endowment, pays no taxes but uses the police, fire and other services paid for by the poor residents of New Haven. I’d like to believe that something will change but I don’t think so. This is just the outrage du jour.
94
How many years ago was it when Leona Helmsley said, "only the little people pay taxes"? I guess she was right.
35
That's right, EdBx, and if you'll recall, they punished her for letting that out. She was right.
How about taxing churches, now that they are allowed to advocate politically? How about taxing their endowments? Why go after universities only?
34
Defeats the purpose of non-profits!
If everyone paid their taxes their would be no national debt!
5
I don't follow your logic at all. Non-profits by definition are intended to put revenue back into the goals for which these entities are designed. This is not to support schemes to minimize or avoid taxes on income, but if non-profits do not get breaks from paying taxes on revenues that are treated as profits, what is their purpose? Schools do not generally pay property taxes for similar reasons.
The problem of tax avoidance does not lie with non-profits: See Apple, any number of Trump Administration members, GE, etc.
This is an outrage. Tuition costs have skyrocketed to such absurd levels that we have an entire generation of young Americans who are crushed under student loan debt. The impact that this has on our wider economy is profound. It causes young people to struggle financially, limits employment opportunities, and puts off the purchase of homes, cars, and building of families. All due to greed.
The university systems in our nation love to tout their non-profit bonafides, but as this article clearly shows they are as much a for-profit enterprise as any other business. They clearly could care less about the well-being of students, the affordability of education, or the quality thereof. Instead, it's all about growing their financial endowment, regardless of what it does to our economy, our environment, or the institutional integrity of higher education.
These universities should be ashamed. Last night's election results give me hope that this time next year we'll be able to sweep Congress clean of Republicans, and install Democrats who will put an end to the grotesque shenanigans exposed in the Paradise Papers.
26
I have many reservations about the conduct of universities, but you do realize that endowment income largely goes to fund educational and research programming?
Well, you know, the smart guys in the ivory towers can't fall behind the less smart but much richer guys on Wall St and in corporations. Too many deans and tenured professors won't work for less than $200-300K for teaching 2 courses per semester, or in some cases, 3 courses per year. with a paid sabbatical every 7 years. and 80% pensions, and generous health care plans. and, sometimes, lovely university-owned homes to live in. and travel junkets for research. and assistants who work for the privilege of sitting at the master's knee. Even state universities have a layer of elites, not so different from the ("formerly communist") Russian leaders and their lovely dachas, while the workers still live in ugly state-built tenements.
So, America now emulates--or represents?--the medieval liege and serf culture. Workers's wages stagnant for the last 40 years, CEO salaries risen to 457x workers' wage in same period. How could that be unfair?
1
The education is funded by government student loans and full-freight-paying international students. The research is funded by federal research grants. The endowment contributes the least.
1
So smart. So very very smart and clever. And heartless.
13
Private k-12 schools, which charge private college tuitions (50K/year) here in nyc, often tell us that there is a gap between expenses and tuition. Are they also hiding cash? Can the NYT please look into that?
7
So a college is a hedge fund with educational window dressing...
24
It's hard to judge the IVY leagues when so many billionaires and corporations are doing the same thing. What is even more sickening is that corporations are set to receive a massive tax cut at the expensive education, infrastructure and health care with no incentive to bring manufacturing, resources or their treasure troves back onshore.
6
Take Away the Tax-Exemption from Colleges and Universties.
For too long, the business of higher education has been paid for, at least in part, by the American taxpayer through the tax-exempt status of these institutions. If Colleges and Universities were no longer tax-exempt, the fear is that the cost of a college education would increase, however, this is not necessarily true. The tax-exempt entities borrow through the issuance of tax-exempt bonds, which should provide a reduced borrowing cost equal to the difference between the taxable and tax-exempt markets. However, the tax-exempt bond market is extremely inefficient, and the colleges and universities do not derive the full benefit. The buyers of tax-exempt bonds do not pay taxes on the interest they are paid on the bonds issued by the tax-exempt entities, and therefore the U.S. Treasury does not receive taxes on this income. Assuming the buyers of tax-exempt bonds are in the highest tax bracket, taxes not paid are equal to about 40% of the interest income. If the interest rate on the bonds was 60% of a taxable equivalent bond, then the universities and colleges would derive the benefit of the tax exemption. However, tax-exempt bonds trade at about 85% to 90% of taxable equivalents, which means the bond holder is receiving 25% to 30% of the value of the tax-exemption foregone by the U.S. Treasury. This makes no sense when the federal government is trying to generate new taxes to pay for tax cuts.
3
Let’s be honest. Fundamentally, we’re all greedy. There may be a few exceptions, a few saints who never skipped a line or snuck a third helping onto their plate but for the most part we prefer to look after ourselves. That’s how we survive. When you’re wealthy that has greater consequences but it still boils down to hoarding and ensuring wealth is increased and most importantly retained.
Can anyone blame Harvard or Yale for attempting to safeguard their earnings and profits? Of course we can. It’s easy to blame, to take the moral high ground and feign shock. It's easy because we aren't wealthy. If we were we would be doing the same and our financial advisers would be encouraging us to make use of every loop hole available.
The Paradise Papers aren’t a new fad. They're an ancient trend that has existed as long as wealth and the desire to accumulate it has existed. That's a long time and you can’t fight human nature. You can only legislate against it. If we don't agree to play by the same rules there will always be an island or a state where the benefits of evasion outweigh the risk of immorality.
What are we left with? A world of extremes and a vast majority too ensconced with everyday concerns and personal distractions to care about paradise or papers. Everything is in the hands of the last investigative journalists and any uncorrupted lawmakers who may still exist within our governments. Only they can ensure everyone is taxed equally regardless of how rich or how poor.
1
Could we now have a list of colleges who have not participated in this process, including those that are phasing out investments in fossil fuels? I see the point, but this is a very broad brush used to tar colleges in general.
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Rather than the rather convoluted proposal in the Republican tax plan to tax university endowments, simply block these blockers and much the same thing will be accomplished.
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I expect each college or university you named in this article sees its mission as the preparation of students to be the leaders of the future--the nurses and doctors, teachers, social workers, lawyers, inventors, scientists, business people, governors, legislators, clergy, to name some. Most likely the words "Lux" and "Veritas" are still painted above a door here and there. I think most take their mission seriously; but sometimes it's harder than others to tell where a line has to be drawn, if resources are tight and everyone else seems to be doing it. Oh wait! Not really.
4
Characterizing these endowment s as benefiting the elite is misleading. Many academically elite schools make it possible for anyone who meets their academic requirements to attend because of the performance of their endowments. For many middle and working class families, an elite school may actually be more affordable than a state school. Any change in taxation should be accompanied by an analysis of how the endowment is used, not simply that it's successfully managed.
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When The acceptance rate for legacies is The same for non- legacies, I’ll believe the egalitarian line the colleges would like us to swallow
3
Of all the tax policy issues facing the country, the preferential treatment offered to colleges, universities, and other organizations on their endowment earnings pales in comparison to what we see in the 'private sector.' Could wealthy colleges and universities offer more student aid through greater endowment spending? Certainly. Let's focus on that.
6
This money should be used to lower the cost of attending college. I am assuming that if the funds are brought home they will be taxed. Endowment funds should be spent and not hoarded regardless of tax consequences.
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No, they will not be taxed when brought home.
As a few others have pointed out, university endowments are tax exempt. The offshore structure is used for convenience and control and not tax avoidance. The article is quite misleading and as such raises alarms unnecessarily.
Allowing universities to avoid taxes and accumulate assets has no apparent trickle down effect at all. For Stanford, my neighborhood university, education seems to have assumed a backburner role as the university acquires more and more real estate and adds high density developments to formerly quiet neighborhoods, paying no property taxes to local communities, a juggernaut whose impact is almost exclusively negative. Legal, maybe, amoral and disrespectful for sure, and all that wealth hasn't prevented them from raising tuition every year.
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Don’t forget all the money Stanford doles out for their sports programs. We should point out that beginning about 10 years ago they eliminated tuition for students from households earning under 150k per year. Room and board must be paid but tuition is not.
1
The "tax haven" aspects of this are unclear.
Most public and private colleges and universities are protected from taxation via the IRS code as most are 501(c)3 entities. This is especially true of colleges and universities which are affiliated with religious institutions.
As for hiding their investments from their students, that is an entirely different matter. As long as they are not breaking the law, what's the problem?
The takeaway is basically that what is legal us what is the problem. Shell corporations, blocker funds, cloaking investments might not be illegal but that's only so because the institutions have wielded their power to push elected officials to structure the laws to specifically allow this. Think of it like paying bridge tolls. Every user is expected to pay a toll. The size of the vehicle and even the time of travel may influence how much that is, but the bottom line is that all pay. What if you were close to a politician, for whatever reason, and also happened to cross a particular bridge in an 18,000 pound commercial truck but mostly between the hours of 8:00 and 10:00 am on Wednesdays. You get the politician to push for a special exemption to the tolls. Not for all commercial traffic. Not for all 18,000 commercial traffic. Not even for all traffic on Wednesday mornings. Just specifically for 18,000 commercial vehicles that cross during that two hour period midweek. After a year of doing so and at great savings, your are called on it. Your response that "it isn't illegal" while technically valid is however hypocritical.
2
This is eye-opening, but why Congress does only wants to tax universities, not hedge funds, despite Trump's campaign promises to cut the enormous unjustified tax loopholes they exploit.
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The problem is that endowments for colleges and universities, as well as a variety of other non-profits such as arts or medical institutions, are intended to be a permanent and ongoing source of income to meet the needs of the organizations for which they are created. These institutions typically raise funds to create the endowments and then use the income generated by the invested funds to both grow the endowment to meet future needs as well as to provide for current operations. If they're not growing the endowment, they risk not having the funds they need at some point in the future.
Reed College, which was criticized in some earlier posts, had its endowment hit hard by the 2008 fiscal crisis; the value of the endowment dropped by 26%. Because of the kind of investment Reed has been doing, its endowment has rebounded and is now worth $550 million. But here's the thing, income from the endowment currently makes up approximately 33% of Reed’s operating budget with the rest coming from tuition, grants, and fund-raising. How much would Reed's tuition need to increase if the endowment income were to decrease because of taxation? If Reed starts withdrawing capital to make up for any lost endowment income, they risk eventually reducing the endowment to a point where it no longer serves the school's needs.
1
As you note the financial crisis of 2008 showed that using endowment to cover operating cost is treacherous. Private universities must attract substantial federal research funding.
College endowments are no different than private foundations. The foundations pay taxes, let the endowment pay a similar tax.
4
Yeah, I'm a chump for paying $500 a month for the $20,000 I earned by working under a 1099 in 2015. If it had been $2,000,000 I wouldn't have paid anything.
Nevermind I was working under horrific conditions maintaining a fire fighting aircraft that was trying to save 5 million dollar houses built in the woods. I should have done something that helped no one but myself, right?
13
Education a human right, subject to universal access up to high school and based on merit rather than financial means in college. In most advanced countries, quality education is best in public universities considered more prestigious than the private system. State universities suffer from de-facto neglect, while the tax-subsidized colleges cited in the Paradise Papers have immense power to siphon away the best teaching and research talent.
America needs higher-education leaders who possess the intellectual depth to serve the public interest, i.e., internalize the sense of purpose to the country and appreciate superior and equitable models that do not leave behind those with the potential to go to college. Faculty chairs, especially in business schools, rarely discuss their de-facto contribution to the inherent systemic bias toward maximizing opportunity for the privileged few. Economists, lawyers and accountants collectively wield tremendous power. How could they advise against shell companies skirting taxes when their alma mater has normalized such deviance, both in unethical practices and in the educational vacuum on the issues of the vital importance to nation building?
Federal and local tax laws must help improve access and education quality. And educational institutions must be a model of exemplarity with zero-tolerance for unethical strategic conduct. Otherwise, widening inequalities will persist at the expense of the quality of life and democracy in America.
8
The universities just followed the marching orders from the politicians: "run them like a business." The schools listened: subvert unions, outsource teaching to temps, serve as revolving doors for termed-out politicians, pass deficits off to citizens, act as vigilantes to bypass courts, spy on employees' social media accounts, fire the dissenters, cover the scandals, and hide the money. What more could the politicos ask for?
16
Riddle me this. Why in the '60's and '70's could your average first generation college kid work their way through college without amassing massive loans, and presumably, without universities parking lots of offshore assets. I don't want to look at part of the picture, I want to understand the whole thing.
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In part, Paula, it was the era before federal loans, and colleges had to make do with people's hard-earned money. I attended New York University in the 1970s with a couple of state incentive awards, a $500 scholarship awarded by my dad's place of work (an aircraft company on Long Island), and money my parents had put away.
The age of easy money led to hikes in tuition, to the hiring of "star" professors, who really don't seem that starry to me, and to building sprees.
1
Back in the 1960s and 1970s, states were more generous in their funding of public universities (I have no idea whether students were able to work their way through private colleges back in those days. In recent years, many states' subsidy of higher education has gone from roughly 40-45 percent of costs to around 15-20 percent of costs, This means that colleges have to increase tuition and fees in order to meet their "needs." Students have to shoulder more of the cost of their education, and one way to get that money is by borrowing. Students also change majors, with many changing multiple times. That often means that they end up taking more credits than the minimum needed to graduate in order to cover all the requirements of the final major they choose. It's not uncommon for students to be enrolled for five years as a full-timer in order to cover a change in majors, or taking a double major, or adding one or more minors in an attempt to make them more attractive to companies that might hire them. And, unfortunately, there are a large number of schools that are more interested in revenue and reputation than iin ensuring that their students are coming out with a skill set that enables them to meet the challenges of the future.
2
We The People have given ourselves over to the financial class, and we show them startling fealty even as they prove over and over again that they are just in it for the money. The financial class has managed to bend Congress to their selfish desires and they are setting out to loot the country out from under us. You know, buried in some conference room, a gang of thieves agreed that student loans and endowments were the new money maker. "Hey, Parker, be sure to lobby for non-forgiveness of student debt, and get the endowment broken up across the island chains."
2
The proposal to tax certain university endowments in reality has 2 distinct components. The first of these is endowment use of provisions in the tax code permitting avoidance or deferral of tax liabilities. From the article it is unclear what other institutions, companies, or private individuals also benefit from these same provisiones. Are university endowments benefitting from rules that benefit only them or are they benefitting from treatment used by other entities? If the issue is use or abuse of these provisiones it is unclear why Yale should be taxed but the University of Texas system left untouched. Without more information it is impossible to know how widespread the use of "blockers" as an investment device actually is.
The second matter is the intended use of revenues generated by the tax. They are neither to increase student financial aid not to increase research spending. Revenue generated by this tax would partially replace revenue lost by a major corporate tax cut. In effect the tax on certain university endowments is a disguised transfer of university endowment income to the corporate sector. Instead of robber barons seeking legitimacy by donating to higher education we would see the reverse.....higher education would be supplementing the income stream of the corporate sector.
University use of blocker corporations is a logical outgrowth of running universities like businesses, using narrow criteria for decisión-making. But this proposal is pernicious.
21
Brilliant tax law usage! I hope BC used this investing loophole! Maybe this will help BC build a possible $1.1B 85,000 seat Retractable Dome Stadium!
15
Ever get the feeling that doing the right thing like paying your taxes is only for chumps and losers? While the smart people play the rigged system to their advantage? Today kind of feels like that.
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Trump brags about not paying taxes: 'That makes me smart'
https://www.cnbc.com/2016/09/26/trump-brags-about-not-paying-taxes-that-...
3
Working a temp job at a tax preparation place decades ago opened my eyes to the realities of the tax code. The more money you have, the more deductions and loopholes there are. There are a million and one ways to structure assets so that an actual individual doesn't own anything on paper, for example. It seems that things have gotten more and more advantageous for the wealthy and corporations since that discovery decades ago.
1
Rich people, rich schools that don't pay their fair share and hoard the proceeds of their greed. What a surprise, right?
139
I'm glad that my $30,000 a year tuition is going to some Carribbean island. College is just one big fraudulent scheme.
41
No tuition dollars go into endowment. Endowments fund the cost of your education NOT covered by your tuition.
2
But if the endowments have grown to the point where their value is greater than $250,000 per student how much support are they really providing? And how much of the discounted tuition they claim to be spreading around is funded by those dollars vs how much comes out of the wallets of those who do not qualify, and thus, pay full price?
2
Republicans haye government. They are doing everything they can to suffocate the government of America. Why? Never mind the reasons they give. The main reason is because only government has the ability to limit the excesses of the wealthy. Since wealth is power in our system, they mostly get their way.
41
Dishonesty/cheating, by our governments and churches and even our schools, appear to be the order of the day these days.
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The US Tax System is a sham.
125
Not a SHAM as much as it is broken. You can thank the U.S. Congress for that!
4
No! It's 'rigged.' There is a difference.
7
Reed College? Do you mean the Left-of-Left Reed College in Portland?
I will repeat what I've said here several times: If we could develop a way to tax Arrogance and Hypocrisy, we could have a government surplus in 15 minutes.
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On the 100 year anniversary of the Russian Revolution., Reed College honors John Reed by establishing a hedge fund in his name
35
Yes. Or perhaps change the name to Leona Helmsley College.
5
Reed College is named after Simeon Gannett Reed and his wife Amanda, who worked to establish the college, not the journalist and author John Reed who happens to have the same surname and is coincidentally from Portland.
4
Nice, and the cost to attend Christan Texas University, 1550/credit hour. Doesn't sound very Christian to me.
126
TCU used the tax laws brilliantly!
TCU plowed its endowment back into fabulous athletic venues, facilities, dorms, education, scholarships and buildings.
Look at the other phony, greedy, slimy Universities that just build a huge pile of tens of billions like Harvard and then issue arrogant white papers on how the Government should tax more and spend on free welfare, healthcare and social programs.
TCU is a brilliant leadership gold standard model on how to run a University.
Enjoy!
and how to they get the basics to invest? From guarateed loans to students, paid for by the TAXPAYER, and then they charge outrageous fees to attend ripping off everyone in the process. That is what education teaches us--how NOT to be a good citizen.
even in a small country like Sweden, they ahve just unearthed 1000 names of nationals who have avoided taxes in the name of growth and greed. Houston, we HAVE A PROBLEM or criminals in government and private enterprise around the world. The time is coming when heads are going to roll. We the underlings feel shaaat on--we pay our fair share--how the trumps of the world paying theirs?
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University endowment funds like these no longer exist to benefit students. They exist to perpetuate themselves and to support an industry of well-heeled lawyers, investment bankers, consultants, etc. that feed on them. Their intentions may be good, but the organizations themselves have reached the point where the survival and prosperity of the organization is at least as important as the original mission.
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I think that’s exactly what’s going on. The educational mission has become secondary; it serves to attract donors, but students are at best a by-product.
2
Tthe endowments provide about a third of the universities' budgets. They allow the schools need-blind admission, no-loan aid packages. Those with family incomes below about $65,000 pay no tuition, too, or board. Those with incomes under $150,000 pay no tuition. The schools also figure travel, books, etc., into their aid packages. The result is, tough the posted price may be $60-70K, few pay that. For most, the top schools are far cheaper than a state school. Grad students get free tuition and stipends of $30-$40K.
May be legal, but definitely it is reprehensible. And it's also incompetent. The fund managers at Indiana University and elsewhere were fools not to realize that this sneaky move would come out.
140
The fact that it is legal, is the most reprehensible fact. This absolutely huge pool of money is but a "slush fund" for the 1%, available to be used for the further subversion of any semblance of a just system of taxation. "Let's kill all the lawyers" comes to mind... or perhaps the politicians whose hand is always held out for the next election... or perhaps both!
I feel like I am the only one left in America without an offshore account to cheat on my taxes. What's wrong with me? I must be naive to think we should all pay our fair share.
311
You are not the only one. I truly think of April 15 as the day I pay for all the ways I benefit from the existence of the federal government. I suspect there are many millions of us.
1
Is this shocking to anybody? Billions of dollars of investments (to educate the young of course), and able to have an army of lobbyists? Just like Big Business, "Big" University is as corrupt, unethical and uncaring. They may preach "higher education", but they are full of it like all of them.
62
Hopefully all these revelations blow up the Republican tax cuts for the wealthy.
It seems that the poor and middle class are really bearing the tax burden in this country, while the GOP insists on providing corporate welfare to big corporations and wealthy donors.
81
Uh, most of these universities are anti-GOP, in case you haven't noticed. The GOP certainly helps the wealthy get wealthier -- just as the Democrats do.
1
Thank goodness for the free press and the job they're doing to expose these nefarious practices. Let the sunlight in! It's time to change the laws.
192
Good luck with this administration.
1
this investment by Indiana University the flagship of my home state should be looked at carefully and debated in the state house to see if those kind of Investments need to be halted
24
God created the human being. Human beings have a lifespan. Lawyer's with Congressional help created these corporations . I believe it's time to give these corporations a decent burial.
16
So much for university administrators needing to have and demonstrate and try to instill a social consciousness in students. Happily I can support my college, but I want to think those who govern my college are high-minded as our social tradition would have it.
5
Who was it who first said "Do as I say, not as I do."
Isn't it time for students and faculty to have places on university governing bodies -- especially as to investment policies?
46
Articles about the use of blocker corporations are interesting. However, where are the articles about how the hedge fund and private equity managers (who are US citizens making billions of dollars annually) who use these strategies to defer their own income taxes for years and even when they are taxed, pay it at the much lower capital gains rate as opposed to ordinary income tax rates that most Americans pay. President Trump promised to close this loophole but, not surprisingly, nothing was done about it in the Republican tax bill. Steve Munchin and Gary Cohen no doubt have friends at Goldman Sachs (or even they themselves) who benefit from this strategy. Closing this loophole would restore some fairness to the tax code and raise revenue that could be used to restore some of the deductions being taken away from the middle class. Why not do this Speaker Ryan?
120
Oddly enough, this was the one economic policy shared by Trump, Hillary and Bernie Sanders.
4
The way the tax laws are written in this country create great incentives for these institutions, companies and private individuals to hide income. The new Republican tax plan will not change this. If you want "tax reform" try something new like treating all income and taxpayers as equals and only use incentives tax incentives that actually create something tangible in the economy.
17
This is no more of a surprise than charities claiming they don’t work for a profit. It’s just accounted for differently. My other big gripe with college, having put two kids through with honors and another halfway there is the idea that college is four years to get a bachelors degree. What a lark. If you’re a teenager and you have your you know what together you might be able to graduate in four, but if you’re a normal kid and just a whiff uncertain about what you want to do you’d better plan on being there for five.
6
As a university professor I completely agree and always tell prospective and current students the truth, that 4 years is possible but 5 or 5 1/2 is average at many schools. Life happens, work happens, interests change, and that can all take time. Noone should feel bad for any of that happening to them. So yes more truth in advertising everywhere is good.
The value of private college education is rising. Now, my school can afford to stop cold-calling me for cash.
39
If congress were honest about tax reform they would start with the elimination of all the tax avoidance schemes exposed in the Paradise papers. How little trust do our institutions and leaders hold now?
131
Daily, we know people of hear of people who suffer under the weight of student loans, while these institutions hide money and amass fortunes. They whould be required to pay off the college debt of thier students with the taxes that they should have paid, along with the taxes they would have owed if they had invested in a non-tax haven place like the USA.
54