The GOP tax reform plan released on Thursday offered up as sacrifice a couple of surprising targets: university endowment plans and their executives. Under the plan, university endowments’ investment income would be subject to a 1.4% tax. In addition, university endowments paying any executive over $1 million would be required to pay a 20% excise tax on the salary. This might be problematic for large university endowments paying highly qualified executives. Princeton University alone pays five members of its investment team over $1 million per year. There is some concern that these taxes would force universities to increase tuition and expenses in order to retain top talent.
See Eric Rosenbaum, Wall Street College Stars Are Surprise Tax Reform Targets, CNBC, November 3, 2017.
Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.
