Proposed Tax Bill Targets Harvard’s Legacy Admissions Policy

**Bill Seeks to Tax Rich Colleges and Support Community Colleges**
A bill in Massachusetts aims to impose taxes on wealthy colleges, particularly Harvard University, which gives preference to alumni and donor families in its admissions policies. The proposed legislation would redirect the tax revenues to support community colleges. The bill, brought forward by two Democratic legislators, is a response to recent legal and public scrutiny of college admission policies and aims to address issues of social and economic mobility in higher education.

**Challenging Legacy Preferences and Endowment Values**
The bill specifically targets colleges such as Harvard and Williams College, which give preference to students whose parents attended the institution, known as legacies, and have high endowment values per student. Harvard, with its substantial $50.1 billion endowment, would face an estimated annual fee of $103 million, the highest among the targeted colleges. The legislation is seen as part of a wider campaign against university admission policies following the recent Supreme Court decision that curtailed race-based affirmative action. In addition, minority groups have accused Harvard of favoring the children of alumni and wealthy donors in its admissions process, which is seen as a violation of federal law.

**Calculating Fees Based on Endowment Value**
The proposed bill uses a formula based on endowment value per student to determine the fees that colleges must pay, with the fees being assigned on a sliding scale. The funds collected through these fees would be placed in a trust specifically designated to support community colleges. However, the legislation faces opposition from an association of private colleges in the state.

**Addressing Social and Economic Mobility**
State Representative Simon Cataldo, one of the bill’s sponsors, argues that admissions policies that give preferences to legacies contradict the goals of promoting social and economic mobility. He contends that these policies favor applicants from wealthy backgrounds over historically disadvantaged minorities who would benefit from race-based affirmative action. Cataldo, a former teacher, emphasizes that schools cannot simultaneously defend race-conscious affirmative action while maintaining admissions policies that disadvantage deserving applicants from marginalized groups.

**Selective Colleges and Legacy Preferences**
Selective colleges often consider an applicant’s family history with the school, which can provide an advantage in the highly competitive admission process. The practice is defended by colleges as a way to foster a sense of community and encourage increased donations, which in turn support financial aid programs for less affluent students. Critics argue that this practice perpetuates inequality by favoring wealthy applicants.

**Targeting College Endowments**
The proposal to tax wealthy colleges is not unique to Massachusetts. Similar efforts have been made in the past, as lawmakers seek to redistribute the wealth held by college endowments. Connecticut, for example, considered legislation to tax Yale University’s $41.4 billion endowment. In 2017, the federal government successfully taxed more than three dozen private universities, including Harvard, Yale, and Princeton, as part of a Republican-led tax cut. This levy on net investment income is aimed at funding corporate tax cuts, but affected colleges have lobbied for its removal.

**Additional Taxes and Implications**
Many of the Massachusetts colleges that would be subject to the proposed fees for community colleges are also paying the federal tax. The federal tax applies to schools with endowment values of $500,000 or more per student, impacting colleges like Amherst and Williams. While Amherst has eliminated legacy admissions, it still uses early decision policies, another practice that critics argue favors wealthier students. According to estimates, Amherst would pay $5.7 million annually, while Williams, the wealthiest liberal arts school, would pay $8.4 million. The Massachusetts Institute of Technology, however, would not be required to pay any fees, as it does not use binding early decision policies or legacy preferences.

**Status of the Bill**
The Massachusetts bill was recently discussed in a hearing and has been referred to the Joint Committee on Higher Education for further consideration. Opponents of the bill argue that banning early admissions could put local colleges at a disadvantage by driving students out of the state and limiting their choices. They believe that policies aimed at college affordability and access should prioritize attracting and retaining students in the state, while also advocating for increased financial aid for deserving students.

In conclusion, the proposed bill in Massachusetts seeks to address issues related to college admissions policies by taxing wealthy colleges and redirecting the funds to support community colleges. By targeting colleges that give preferences to legacies and have high endowment values, the legislation aims to promote social and economic mobility in higher education. The bill is part of a broader national discussion surrounding college admission practices and addresses concerns about inequality and access.