OMBUDSMAN ALERT: New bill allows university endowments to be taxed for first time

BY DR. LOUIS ALPERT 
Ombudsman

As an MIT alumnus and former mathematics instructor at MIT, I received an alarming letter from MIT President Dr. L. Rafael Reif on December 20, 2017. This letter concerns the new federal tax bill and its impact on MIT and other institutions.

“Unfortunately, despite extensive efforts by MIT, on our own and in concert with peer schools, the tax bill does include a tax on the net income from the endowment and other investments of about 30 schools that meet a certain endowment threshold, including MIT,” says Dr. Reif. “This is the first time that Congress has taxed university endowments and the first time it has targeted a tax at specific universities.

“As an offset for a bill that will cut $1.5 trillion in taxes over 10 years, this tax is expected to bring in less than $200 million in revenue annually…it will reduce MIT’s ability to undertake exactly the kind of activities that Congress wants us to pursue…pioneering research…maintaining America’s scientific leadership vital to the national interest (and) advancing the public good,” he said. “According to our current analysis, this new tax will cost MIT at least $10 million a year.

“Several names of the additional 30-odd leading US universities unfairly targeted by this new tax law, as well as MIT, include Harvard, Yale and Princeton on the East Coast, and the California Institute of Technology and Stanford on the West Coast,” Dr. Reif continued.

The Ombudsman Alert is particularly concerned that this new tax bill penalizes only the leading research universities in America. This is most ironic since these great universities are the very ones that have made most of the critical discoveries and advanced the technologies in the United States to a level that has made our country the envy of all others in the civilized world.

Can the United States afford to give up their current lead in the development of these advanced technologies and research programs, including those in the fields of the medical sciences? Especially when countries like China, Japan and Russia are getting very close to achieving the standards currently reached by our country?

Readers, we must contact the members we have elected to both the US House of Representatives and US Senate to ensure that this blunder in the new tax law is corrected! And we should tell President Donald Trump that scientific advancement is needed to “Make America Great Again!”

Please direct all comments and questions to editor@rocklandcountytimes.com.

  louis alpert, MIT, ombudsman