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Central Hall | Col­legian

Hillsdale College should be worried about the Repub­licans’ tax reform plan.

Although many con­ser­v­a­tives cel­e­brated the passage of the bill through the Senate Budget Com­mittee, they ought to oppose the bill’s intro­duction of a uni­versity endowment tax.

If passed by Con­gress, this bill would impose a 1.4 percent tax on the investment incomes of uni­ver­sities with endow­ments at or above $250,000 per student. According to reports, this new tax would affect about 70 insti­tu­tions — including Hillsdale College.

Our endowment is about $540 million, and there are roughly 1500 stu­dents enrolled here. That means there is about $360,000 in the endowment for every student, qual­i­fying Hillsdale for this new tax.

The U.S. tax code is over­com­pli­cated and des­per­ately in need of reform. Many mea­sures in the Repub­lican plan deserve support, such as cutting cor­porate taxes and reducing the number of tax brackets, but the pro­posed endowment tax is not such a measure.

Repub­licans intend this new tax to help pay for the tax-reform package. Uni­versity endow­ments are a con­ve­nient target for new taxes, because the Repub­lican base views the academy as one of their great adver­saries in the culture wars.

R.R. Reno, the editor of “First Things,” defended this new tax as a weapon for the culture war. He thinks that it should be even higher.

“Cul­tural power has become con­cen­trated in a nar­rower and nar­rower class of people, and the insti­tu­tions that serve (and per­petuate) them have become arrogant and detached,” he wrote online earlier this month.

According to Reno, many of the problems in the country can be traced to a dere­liction of duty by the academy. Tenured rad­icals and socialist pro­fessors corrupt the youth, Reno argued, and therefore deserve this tax as a pun­ishment.

“Taxes have con­se­quences. Raise taxes on some­thing, and you’ll get less of it,” he wrote. “That’s exactly why the tax on super-sized uni­versity endow­ments is wise. We need less elite snobbery, con­de­scension, and civic irre­spon­si­bility. Which means we need less elite edu­cation.”

Rank-and-file con­ser­v­a­tives seem to agree. In a recent Pew Research Center poll, 58 percent of Repub­lican voters said they believe that insti­tu­tions of higher edu­cation are neg­a­tively influ­encing the direction of the country.

As insane as campus culture can be, con­gres­sional Repub­licans should stop exploiting anger at the academy to make ends meet. The uni­versity endowment tax will dis­in­cen­tivize growing insti­tu­tions and punish estab­lished col­leges — such as our own — which uphold the values culture war­riors claim to defend.

Thanks to the gen­erosity of friends of the college, Hillsdale has a remarkably large endowment for an insti­tution of its size. Provost David Whalen told the Col­legian in 2013, “It is not too much to say the endowment is what permits the inde­pen­dence of the college. If the college did not have the endowment it would not be able to afford stu­dents’ schol­ar­ships.”

The pro­posed endowment tax chal­lenges Hillsdale’s prized inde­pen­dence. 1.4 percent may seem like a meager number, but the costs of running an edu­ca­tional insti­tution can add up. On top of that, any time a new tax is intro­duced, Con­gress could raise it at any given time in the future — meaning that this pro­posal could set a dan­gerous precedent.

Grove City College, Wyoming Catholic College, and other schools that refuse to accept gov­ernment funding are looking to achieve the same kind of inde­pen­dence we have. Even if their endow­ments do not trigger the tax yet, the tax could still make it harder for them to grow.

Con­ser­v­a­tives ought to look to encourage this growing movement rather than stifle it. Legit­imate com­plaints against the academy are com­plaints about insti­tu­tions which have for­gotten their purpose, not the idea of schol­arship or liberal edu­cation.

Reno and other con­ser­v­a­tives support the endowment tax insofar as it hurts their enemies. Hillsdale College, on the other hand, is trying a dif­ferent approach. To take back the academy, we’re offering an alter­native to its rel­a­tivism and intol­erance.

America needs more elite edu­cation, not less. We should be trying to redeem the academy and restore its purpose. The endowment tax inhibits that mission, and the Senate should remove it from the final version of their tax-reform bill.

 

Michael Luc­chese is a senior majoring in American studies.

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Michael Lucchese
Michael Lucchese ‘18 is majoring in American Studies, and is a member of the Dow Journalism Program. In addition to the Collegian, he has also contributed to The Federalist, Acculturated, Conservative Review, and several other publications. In 2015, he reported on national security and foreign policy for Breitbart News. He also hosts a weekly radio show, The Michael Lucchese Show on Radio Free Hillsdale WRFH 101.7 FM. e-mail: mlucchese@hillsdale.edu Twitter: @MichaelLucchese