Bipartisanship is making a comeback!
Congressional Republicans forced through a tax on big private university endowments in last year’s tax reform package (rather watered down in the final bill). A couple Harvard Law School professors said their institution deserved the bludgeoning, given how they treat conservatives on campus.
Now the Democratic nominee for Massachusetts governor, Jay Gonzalez, is making national Republicans look squeamish by comparison.
The Harvard Crimson reports Gonzalez announced his $500 million annual endowment tax on Harvard in the belly of the obscenely wealthy beast Wednesday:
Gonzalez’s plan would levy a 1.6 percent tax on private, non-profit colleges and universities in the state whose endowments total over $1 billion. Harvard would qualify, as would four of its fellow research institutions — MIT, Tufts, Boston University, and Boston College. The four other affected schools are small liberal arts colleges Wellesley, Amherst, Williams, and Smith.
Gonzalez said at the press conference that the tax would ensure these universities finally pay their “fair share.”
“While the wealthiest among us have become even wealthier over the last several years, middle class and lower income families continue to struggle to get ahead,” he said. “I believe this is a fair proposal. These non-profit institutions have accumulated enormous wealth, in part thanks to the fact that they are not subject to taxation.”
Cambridge Mayor Marc McGovern, one of whose constituents is Harvard, appeared by Gonzalez’s side at the event.
Gonzalez is justifying the tax by saying the money from all wealthy institutions will pay for public education and transportation improvements. McGovern says exempting billion-dollar endowments would make no sense to those who exempted private institutions “hundreds of years ago.”
Had these taxes been in effect in fiscal year 2017, Harvard would have paid $543 million.
There are three hilarious things about this. One, of course, it’s on top of the federal endowment tax Harvard is now obligated to pay. Two, the Massachusetts congressional delegation – all Democrats – opposed the federal endowment tax, according to the Crimson.
And three, it may force the rich liberals who run Harvard to throw their weight behind incumbent Republican Gov. Charlie Baker, who takes every opportunity to distance himself from President Trump in the blue state.
Boston Herald columnist Joe Battenfeld quoted the governor saying it was a “bad idea” when Trump proposed the endowment tax and it’s still a bad idea when his opponent proposes it. Republicans have been hammering Gonzalez for how he’s going to pay for his pie-in-the-sky promises, and Battendfeld called his solution an “embarrassing dud.”
“Expect to see the Gonzalez tax plan in a Baker ad soon,” the columnist writes, noting the parade of prominent Massachusetts Democrats who savaged the Trump plan:
The unveiling of Gonzalez’s tax idea capped a disastrous day for the Dems as a new Suffolk University poll showed Baker clubbing Gonzalez by a huge margin, while three-quarters of voters — including Democrats — approved of Baker’s job performance. Maybe even worse for Democrats, the poll showed voters rejecting the claim that Baker was somehow in cahoots with Trump. …
Sen. Elizabeth Warren called the Trump plan “completely backwards” and said it will “increase the burden on young people already struggling with student debt.”
Warren yesterday tried to soften the blow for Gonzalez, a spokeswoman telling State House News Service she “applauds” him for “starting the conversation” about ways to increase investments on education and transportation.
The Crimson notes a potential legal problem with the Gonzalez plan: It might require a change to the state constitution. The nominee claims this can be accomplished by changing state law, not the constitution.
Maybe his plan was intended as virtue-signaling, a safe way to prove his woke bona fides against a governor who seems perfectly acceptable to his party’s constituents, without having to actually implement his plan in the face of a certain legal challenge.
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