On May 11, 2021, Arkansas Senator Tom Cotton unveiled his latest proposal to take a bite out of the education-industrial complex. His Ivory Tower Tax Act would establish 1% tax on the value of the endowments of the wealthiest private universities in America to help fund vocational education and training.
He tweeted, “Our wealthiest universities have amassed billions of dollars, virtually tax-free, all while indoctrinating our youth with un-American ideas. My bill will tax mega-endowments to support training programs to create high paying, working-class jobs.”
In addition, Cotton’s bill would also require “these institutions to draw down five percent of the value of their endowments each year”, according to a press release from Cotton’s office. The bill’s text can be found here.
“Our wealthiest colleges and universities have amassed billions of dollars, virtually tax-free, all while indoctrinating our youth with un-American ideas. This bill will impose a tax on university mega-endowments and support vocational and apprenticeship training programs in order to create high paying, working-class jobs,” declared Cotton.
The Ivory Tower Tax Act does the following:
- Levy a one-percent tax on the fair market value of endowments held by the richest private colleges. The tax would apply to private colleges that 1) have more than 500 full-time enrolled students, 2) have endowments worth more than $2.5 billion and $500,000 per full-time enrolled student, 3) do not have a religious mission.
- Generate an estimated $2 billion in revenue per year, which would be redirected to support vocational and apprenticeship training programs.
- Require the richest private colleges to distribute at least five percent of their endowment to support their educational mission per year, or else face a penalty. This requirement mirrors the tax treatment of private foundations.
Cotton’s bill is a good first step in taking the fight to the higher education establishment. As far as the friend-enemy distinction is concerned, universities are the clear enemies in this culture war. https://8d7edc495646e9b9e1e1e0d973ae815d.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html
Beyond that, the Right should try to draw from America’s historical roots and promote other non-state educational alternatives such as private schooling, homeschooling, educational cooperatives, and other localized forms of education. This should be part of a multi-pronged strategy to break the Left’s education conveyor belt.