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Friday, December 21, 2007
Share the Wealth
One Herbert Allen has a very interesting Op-Ed in the NYTimes today. He notes that there’s an enormous disparity of wealth between the wealthiest colleges and universities and the rest. Some of the richest have endowments approaching and even exceeding $1M per student. So:
What to do? Well, here’s one solution: tax the investment income of the wealthiest colleges (though not their endowments). If the endowments of all academic institutions were evaluated on a per student basis, a standard could be set that could begin to allow revenue sharing.
...An example: Harvard or Williams (my alma mater) have endowments that are well over $500,000 per student. Why not take the colleges whose endowments exceed that per student amount and tax their capital gains? The tax revenue could then be put into a designated pool and distributed pro rata to colleges under the base level. The college with the lowest per student endowment would get the highest share.
Comments
Why not take the colleges whose endowments exceed that per student amount and tax their capital gains?
That would be an interesting ethnomethodological exercise all right. I would love to have a chance to see the proliferation of forms that the storm of resistance would take, and the ingenious ways that would be found to show that Harvard is a quintessentially egalitarian and democratic institution.
Unfortunately, I think that the proposal would be strangled so quickly that no concerted response would really be required.
I’ve been reading the humanists of sixteenth century Europe recently, and the Sorbonne model comes to mind. The scholastic universities had grown so enormous, so self-sufficient, and so impervious to influence from the outside that they had become impediments to thought.
That probably isn’t what you were trying to say, but I see contemporary universities that way—whereas people within these universities tend to think of them as happy refuges where those who have survived the vetting processes can freely play, pursuing Truth without let or hindrance. (Or at least the tenured and methodologically correct ones among them think that way. Or some of them anyway. )
Oh, I agree with you about what universities are today. They’ll have none of this go boldly where none have gone before, or just plain fun. I also agree that we’ve got a snowball chance in hell of seeing this kind of redistribution. Still, it’s an interesting idea.
The main problem is that places like Harvard have huge endowments because Harvard graduates make a lot of money and donate that money to the university. Once donors think that their future money might not go to their alma mater, they’ll probably just not donate. Donors aren’t interested in funding education; they are interested in funding certain sites where education happens to take place.
I agree with Luther that this sort of disincentive would slow giving to places like Harvard to a grinding halt. The donors will find other things to do with the money. Taxing the highest earners and investing in higher education is more of an honest way to get the money than these sort of tactics.
I think that Harvard graduates should be tracked down to their places of residence and the waterboarded in front of their terrified families until they make the appropriate donations.
We have to take the gloves off, guys. We have to unleash the awesome power of our opinion. The time has come for us to take power and tell those motherfuckers at Harvard how it is! Victory is ours! To the barricades!
Why not just get the government out of funding private colleges and universities and directing the money instead to public higher ed--specifically in the form of building endowments there? Back in March ‘06, while debating my libertarian ex-co-blogger on privatizing SUNY, I almost put it that way.
Something about this really isn’t clicking for me. Are we supposed to believe that the problem with higher education has been created by the vast wells of money underneath institutions like Harvard? That money is an absurd trifle compared to the annual incomes of our wealthiest citizens, which, since 1980, have been taxed less and less. I’m deeply uncomfortable with raising taxes on universities in the same decade that we slash them dramatically for CEOs.