Alexander Reid Quoted About Impact of Endowment Tax on Wealthy Universities

News / October 5, 2022

According to an Oct. 4, 2022, Wall Street Journal article titled “Endowment Tax on Wealthiest Universities Netted a Fraction of Predictions in 2021,” IRS figures show that the impact of a federal tax on universities’ endowment incomes has “so far been minimal.”

Established in 2017 at a time when wealthy universities were being criticized for continuing to raise tuition as their endowments thrived, the tax was initially expected to bring in $200 million per year, according to the article. In 2021, 33 schools paid a total of $68 million.

Partner Alexander Reid told the publication that this amounted to “a rounding error for the schools, a rounding error for the government, and really just a thumb in the eye more than anything.”

Read the article (subscription required).