Ways and Means Chair Issues New Demands to Harvard, Penn, MIT, and Cornell

Ways and Means Chairman Smith is wasting no time picking up where the House left off last year. In a January 10 letter to the Presidents of four universities, Smith said this:

As you know, your institutions are aided by the beneficial treatment provided to nonprofit, tax-exempt entities. Your universities also receive funding from federal grants and appropriations, support for student loan assistance, lucrative financial benefits from your tax-exempt status, and the advantageous tax treatment of your institutions’ endowments.  You may also be aware that there are certain standards your institutions must meet to receive this highly advantageous and preferential treatment. For example, to be exempted from federal income taxes and have eligibility to receive tax-deductible contributions, your institutions’ activities must be primarily for educational purposes2—meaning that both individual instruction for the purpose of improving or developing students’ capabilities is provided and that such instruction on subjects is useful to the individual and beneficial to the community. Additionally, since your institutions receive federal funds from the U.S. Department of Education, you are also required to comply with relevant antidiscrimination laws.

The letter continues by describing acts of anti-Semitism on the various campuses and comparing the recipients’ responses to those acts with their responses to speech against transgender people and people who thought George Floyd deserved death on the side of the road while the whole world watched.  The letter then states the following before demanding answers to a list of questions regarding the universities’ exempt status: 

These actions, inconsistencies, and lack of a substantive response raise several questions, including whether your institutions are fulfilling their educational purposes as required to receive 501(c)(3) tax-exempt status, and whether your institutions are adequately protecting Jewish students from harassment and acts of violence in compliance with antidiscrimination laws. These specific incidents add to ongoing concerns that “elite” American universities are failing to provide instruction beneficial to individuals or the community and are instead instructing students to have disdain for the United States and the very communities they live in. Ultimately, as the U.S. House Committee with primary jurisdiction over tax-exempt institutions and the treatment of their endowments, we are left to wonder whether reexamining the current benefits and tax treatment afforded to your institutions is necessary.

darryll k. jones