As many on this blog know, I have been one of the most vocal critics of Harvard and its history of viewpoint intolerance and attacks on free speech. That includes dozens of columns, a book, and a debate at Harvard Law School denouncing the purging of Harvard’s faculty and student body of Republicans and conservatives. I hope that this work offers some context and perhaps credibility for my reason for writing this morning: the threats to remove Harvard’s tax-exempt status are fundamentally wrong. Such a move would produce lasting damage to both to higher education and the country as a whole.
After Harvard refused to comply with demands from the Trump Administration, the President called for its tax-exempt status to be lifted on Truth Social:
Perhaps Harvard should lose its Tax Exempt Status and be Taxed as a Political Entity if it keeps pushing political, ideological, and terrorist inspired/supporting “Sickness?” Remember, Tax Exempt Status is totally contingent on acting in the PUBLIC INTEREST!
Some commentators have picked up on this call, including some who cite the 1982 decision involving Bob Jones University, in which the Supreme Court upheld the denial of tax-exempt status.
I obviously agree with many of the Trump Administration’s complaints against Harvard over its anti-free speech history and lack of diversity of viewpoints.
The anti-free speech movement in the United States began in higher education and these schools constitute the hardest silos for reform. Most faculty have refused to change their hiring trends with many departments now with no Republican or conservative faculty. Indeed, many professors at Harvard would rather bulldoze the campus than allow greater diversity of viewpoints in their departments. I have written that the current generation of faculty and administrators is destroying higher education to replicate their own ideological orthodoxy.
This is not about them. It is about the future of higher education and how we reform higher education is as important as the need to reform. Few of us would want the government to dictate hiring or teaching decisions in higher education. My book suggests some aggressive measures to reform higher education. That includes reducing funding and increasing reviews of university practices. The removal of tax-exempt status is not one of those measures.
Higher education plays a critical role in our economy. The schools are the engines of innovation and training that allow us to remain competitive in the world economy. Not only are these schools one of our largest employers, but they are also essential economic and social institutions to many local economies.
Most importantly, tax exemption should not be a status bestowed upon those adhering to the demands of whatever party is in power. Free speech and associational rights are fostered by granting this status. While Harvard and other schools have abandoned core values, educational institutions are afforded tax-exempt status.
Almost ten years ago, Congress moved to impose tax burdens on Harvard and the larger academic endowments which make profits off their investments. The Tax Cuts and Jobs Act of 2017 imposed a 1.4 percent tax on those institutions. If tax-exempt status were removed, it would kick that burden up to 21 percent, causing a massive financial loss for many schools. It would likely result in an enormous reduction in research and even school closures.
Now, back to Bob Jones. I have long been critical of the IRS standards used to determine when tax exemption is not in the public interest. In the case of Bob Jones, the university was engaged in racial discrimination. However, the actual standard is far more vague and could potentially be used more broadly.
In the case of Harvard, some are arguing that anti-Semitic activities on campus can be treated as similar to the discrimination at Bob Jones. There are obvious distinctions. At Bob Jones, the discrimination was embodied in university rules and based on the school’s religious values at the time.
The danger is that the Trump Administration would open the door to highly subjective determinations that target disfavored schools. If we go down this path, a new Administration led by President Harris or Walz could target conservative schools for discriminating against other groups or viewpoints. The government would then be able to hold financial control over institutions of higher education. It could be the death knell for higher education.
Some of us have been targets of academic intolerance for years. I have had calls for my termination for decades since I testified in the Clinton impeachment. It is not easy today to be a dissenter in higher education. You are shunned, isolated, and harassed. Many conservative, libertarian, and dissenting faculty have simply left out of exhaustion. The purging of our ranks rivals the crackdowns during the McCarthy period with most faculties now running from the left to the far left.
As one of the long-standing targets of this culture, I have spent my career fighting for change. However, I do not see the advantage of replacing one source of political control by another. We still have the greatest higher education system in the world. We need to find ways to reform it, not ruin it with impulsive measures.
The problem is not Harvard as an institution. It is the biased administrators and faculty who have a stranglehold on these institutions. However, if you want squatters out of a home, you do not burn the house down.
My book details ways to reduce federal and state support for universities while organizing donors to force changes at these institutions. It will not be easy or fast. However, if we want to remain the world’s premier higher education system, we need to focus on funding and enforcement issues, not tax exemption.
Jonathan Turley is the Shapiro professor of public interest law at George Washington University and the author of “The Indispensable Right: Free Speech in an Age of Rage.”
The purging of “wrongthink” is not a new thing at Harvard. During the early 70’s a number of PhD Economics candidates were approaching tenure status. Most of them Marxists, Marxist adjacent or members of the Union for Radical Political Economics. They included Sam Bowles, Art MacEwan and Herb Gintis. There were quite a lot of them. The Board of Governors and many large donors became alarmed that these leftists (in the old sense of the word) were becoming predominant in the Economics Department at the heart of capitalist establishment. They were all quietly disappeared to lesser institutions around the country with “rightthink” free-marketeers and Neoliberals assuming their places.
“. . . a number of PhD Economics candidates were approaching tenure status.”
That is impossible.
Professor Turley, sometimes the squatters burn down the house.
And I think you are too close to this particular issue to be objective.
The analogy “if you want squatters out of a home, you do not burn the house down” is too simple to apply to Harvard under the current circumstances. A more apt description would be the ‘squatters moved into your house, fortified it, demanded that you pay for the upkeep of the place, their room & board and lured in your kids and brainwashed them into being squatters to boot. All the while the squatters carried on with thinly veiled illegal activities (discrimination) while hiding under the banner of ‘free speech’ and academic freedom.’
While I certainly don’t condone Bob Jones U., at least they had the guts (or stupidity) to put their beliefs into policy. The squatters at Harvard carry on their illegal activities while hiding behind vagary.
I agree that there is danger in going down the path of “highly subjective determinations that target disfavored schools”. Unfortunately, when dealing with schools that have ‘endowments’ greater than the budget of many states (read war-chests), are composed of faculties that have demonstrated functional intolerance of opposing views and have been convicted in court of outright discrimination…there is little choice other than to act as this is now a long term problem that shows no signs of spontaneous improvement. Really, under such circumstances, can we make a distinction between faculty/administration and the “institution”?
We do not have to go whole hog on this intervention. Leave their tax-exempt status alone unless they have been proven, as an institution, to have broken the law (recall Harvard’s recent loss in the SCOTUS). However, permitting foreign students to attend an institution that not only pushes political agendas but is unable/unwilling to police the activities of those foreign students being trained as squatters is another matter.
Which is worse? That Bob Jones embedded racism in its rules or that Harvard does it surreptitiously, hiring racist or anti-Semitic or anti-American professors, not protecting or even recognizing the plight of its Jewish students, favoring blacks over Chinese and whites, and so forth? It’s not questionable it does these things. I believe Harvard and other Ivy-League schools do far more damage than good, even if they are on the forefront of many studies.
Good article professor. There is no doubt institutions such as Harvard are heavily left leaning, however, they do have the protection of the first amendment. Trump’s actions are obviously attempting to chill such speech.
If we equated anti-semitism with prejudice and substituted racial for anti-semitism we would have much stronger reactions for essentially the same equation. Why do we not see this for what it is, an excuse to hate. Perhaps it is even worse in that antisemitism is being taught as a righteous belief and condoned by the left and mainstream press. Prejudice is a deplorable animalistic reaction to one’s insecurity and fear. I thought we had evolved, I guess not.
It is about the future of higher education and how we reform higher education is as important as the need to reform.
We need to treat them like a poisonous snake, cut off their head, and toss them into the can. Like a patient on life support for 5 years, sometimes you have to accept that your time is coming to an end because you have run out of interventions.
Few of us would want the government to dictate hiring or teaching decisions in higher education.
You well know that they have been doing so for decades. Obama and
BidenObama2/Susan Rice/Ron Klain have driven Marxist “equity” dogmas, CRT, DEI, WOKE, anti-racism, gender studies, black studies, et al in higher ed through blackmailing policies. Medical education in America reflects less science and more sociology and political grievance theories because of Democrats hatred for science, and dependence on soft curriculumHigher education plays a critical role in our economy.
True but in a negative role. They bleed our US Budget, students default on loans, universities profit immensely, outcomes are dismal, higher ed is seen as a rite of passage, not as an intellectual path to greatness . Cut them off 100%.
The schools are the engines of innovation and training that allow us to remain competitive in the world economy.
Hardly. Do a search on pubmed for the last 5 years on molecular mechanism of atherosclerosis, the leading cause of death globally. China. Chinese medical researchers are pummeling American researchers with the sheer number of research studies they publish annually.
https://pubmed.ncbi.nlm.nih.gov/?term=molecular+mechanisms+atherosclerosis&filter=datesearch.y_5&size=200
Meanwhile American medical students cant even explain the basics of atherosclerosis at the molecular level: hint, it involves inflammatory pathways.
Not only are these schools one of our largest employers, but they are also essential economic and social institutions to many local economies.
This is truly a ridiculous argument. Funding evil because it sustains a people is no excuse for sustaining evil.
Good schools will attract good students who will thrive in whatever amenities the campus offers. Faculty make excellent universities, not buildings
Removing tax-exempt status “would produce lasting damage to both to higher education and the country as a whole.” (JT)
That’s an odd claim.
For decades, there’s been an entire industry of tax-paying, for-profit colleges — institutions that are financially sound and far better managed.
I think JT is wrong on this one. Here’s why. Like most colleges and universities today, Harvard is a school and a business. It sells education, and its diplomas are worth considerably more than diplomas from the “free” state colleges and universities. Graduates are guaranteed success in business, politics, and public service. For example, with one exception, all our current Justices of the Supreme Court are graduates of either Harvard or its sister school, Yale, or both.
To keep its business alive and well, Harvard undergraduate schools charge about $60,000 per year in tuition. Harvard Law School charges about $80,000 per year. Room and board may run these charges up another $5-$7 thousand per year. Harvard’s endowment, managed by the Harvard Management Company, Inc., is about $50 billion, and assuming it grows annually at about 8 percent, this would amount to earning about $4 billion in capital gains or interest. These figures have captured the public’s attention and not in a positive way. During tax season, especially, they have raised serious questions about Harvard’s tax exemptions. No other business, per se, with numbers like this would enjoy the tax benefits of Harvard.
So, what’s the answer? Here’s one suggestion; there may be others. Impose a tax on the annual earnings of capital gains and interest (not on the endowment itself) by the Harvard Management Company, Inc. Establish a student loan program and allow the university to deduct as a normal business expense the cost of running the program. Also, allow tax deductions for tuition waivers awarded by the school to promising low-income U.S. students with excellent grades and high SAT scores. By doing the good work envisioned by John Harvard, the 17th-century Puritan minister for whom the school is named, Harvard can render some of its wealth to God and Caesar. Just like most companies that balance their assets and liabilities for tax purposes, the amount of money spent on behalf of Harvard students could be amortized efficiently to reduce the school’s annual tax liability to zero.
Harvard already runs a money-making annuity program that guarantees its elderly clients a generous return each month for bequeathing a large portion of one’s wealth. The monthly payment depends on the size of the relinquished endowment and the donor’s age. These annuities and the Harvard department that runs them enjoy favorable tax breaks for the benefactors as well as the school. This program, in part, keeps the school’s immense endowment growing. All its good intentions notwithstanding, we must ask ourselves how this program differs from a conventional tax shelter that the IRS may frown upon.
“No other business, per se, with numbers like this would enjoy the tax benefits of Harvard.
So, what’s the answer? Here’s one suggestion; there may be others. Impose a tax on the annual earnings of capital gains and interest (not on the endowment itself) by the Harvard Management Company, Inc.”
Are you sure about that? Trump created his “Trump University” to take advantage of that tax exempt status.
Imposing a tax on capital gains would raise a serious legal challenge threatening to tax every Hedge fund manager’s capital gains. We all know they won’t stand for that and Republicans would quickly shoot down that strategy as “unrealistic.”
Major corporations enjoy the same thing. It’s not just Harvard. Think tanks also enjoy their tax exempt status under the same category. To tax them would mean every 501(3)(c) would be subject to the new tax. I’m sure the Heritage Foundation and the Federalis Society would push back forcefully against any taxation on capital gains.
This from a troll who couldnt accepted into Uranus University. Well, maybe ?
George: Thank you for your comment. Title 26 of US Code (IRS Code) allows for different entities or businesses to be treated differently under the tax codes so I don’t think you’re warning would apply as hedge funds are quite different from university endowments. There already is a tax on capital gains and the 501c3 entities are already under IRS requirements to operate in the “public interest.” Perhaps the larger issue here and one that JT does not speak to is, what is the specific definition of “public interest?” Many of our statutes, from FCC licensing of radio and TV stations to Mosques, Synagogues, and Churches enjoy their tax-free privileges either on constitutional grounds (First Amendment in the case of the latter), or because they operate in the public interest (radio and TV stations). The concept “public interest” is very subjective and what I think, or you think it is may be very different. I think we need to find a universal definition for public interest and then move to these other issues.
jjc,
You make a valid point. It seems the Trump administration is vaguely invoking the “public interest” violation without explaining exactly what it means by the public interest. Because it can mean a lot of different things under different contexts. That’s why we have the APA. It puts the burden on the government to prove exactly what the violation is and Trump has not provided one. It only levels the accusation and promptly freezes funding and threatens punishment based on vague claims of law violations.
This is where Harvard and many other schools have a better than likely chance to succeed in court.
I’mm not exactly sure how the APA would apply here. The IRS code is statutory law. Assuming the Treasury Department or the President would want to amend or change the existing Code of Federal Regulations implementing the IRS Code to tax something like the Harvard Management Company, Inc’s capital gains and interest, it could be done by either legislation or by issuing a Notice of Proposed Rulemaking (NPRM) under the APA. That would allow for public comments and hearings, if requested and approved. Several years ago, a Rasmussen poll found that 71 percent of the people supported taxing endowments. Last year, two members of the Massachusetts House introduced a bill to place a 2.5% excise tax on all private higher education institutions with over $1 billion in endowments. The obvious target here was Harvard but the bill seems stalled in the Senate. TYhis suggests to me that there might be bipartisan support for an APA NPRM, if this route is taken. And yes, an agency’s final action can be petitioned for judicial review but that review is very limited and only considered whether the rulemaking by the agency was caprcious, arbitrary, or an abuse of the agency’s statutory authority. The court, according to last year’s Supreme Court ruling changing the Chevron deference, would have little or no regard for the merits of whetherto tax or not, as long as the agency’s rule satisfies the other requirements.
jjc, in order for the IRS to revoke Harvard’s tax exemption it must explain exactly what it is that they did that merits a revocation. Simply saying they are not acting in the public interest is enough.
There are specific requirements that the government must meet in order to grant the the removal of the exemption. This is why laws like the APA and even the IRS’s own rules require specific reasons. So government officials like Trump cannot arbitratrily use these kinds of threats to get what they want and force schools or entities to do what what they want.
The burden of proof rests with the government since it is the one making hte accusation. It must prove in court that Harvard or any of those schools violated the law. They haven’t done that at all.
Wouldn’t the absense of the Chevron deference give a judge more discretion on determining if the schools violated the rules or the law by requiring the government specify exactly what rules were violated and how? Trump is only leveling a very general accusation that they are not acting in the public interest in order to justify revoking the tax exemption. They want to force the school to follow the government’s orders by threat of financial harm and punishment by way of revocation of tax exempt status.
The government hasn’t said exactly what the violations are.
“Trump created his “Trump University” to take advantage of that tax exempt status.”
Yet again, just making stuff up.
Trump U. was for profit.
I respectfully disagree. Harvard the institution is inseparable from its governors, administrators, professors, and students. If you threaten to burn down the house, you may influence some of those to kick out those who refuse to obey the law. Or not, in which case Harvard gets the Bob Jones treatment.
The president is forcefully coercing a private school to suppress it’s academic freedom and freedom of speech because it doesn’t like the fact that it allowed students to express their political views and protest against Israel.
Threatening to freeze federal funding without evidence of a violation and threatening their tax exempt status are unlawful. Trump is more likley to lose this case in court since it will be challenged under the APA and Title VI. Trump already has a long history of incompetence and failure to follow the rule of law.
“To Big To Fail” = “To Big To Non-Tax-Exempt”
What does that tell you ? (ret.)
It tells you Trump is right, and there are a myriad of other types of Institutions,
not just Universities, that have enjoyed the comforts of the United States (Home)
without paying for it.
Spoiled Freeloaders
I am opposed to the very concept of tax exempt entities. It discriminates against other entities that also provide useful and essential services. Non-profit is a standard without true meaning as any actual profit can be allocated to an expense account to make it disappear. There are thousands of NGOs and other so-called non-profits that pay no taxes but receive government subsidies while serving “progressive” ideals and constituents. If what these non-profits do is so essential, there would be a marketplace for it. It is simple, you start a NGO, the USAID gives you a large subsidy, you don’t have to sell your services in the marketplace – just pretend you serve anyone, then give yourself a nice fat salary as director (ask Stacey Abrams). Universities are certainly useful in principle and there is a marketplace for educational services. They are only non-profit in name as they maximize tuition fees as any commercial entity would. Presidents of universities make up to a million a year, professors are overpaid relative to their output. Education is important, so is almost anything else: bakeries, grocery stores, dentists, doctors, DIY stores, any store for that matter, plumbers, electricians, cat repair. So, why is education selected for tax exempt status but my plumber is not? The criteria are very subjected and I think tax exempt status should be removed from the tax code altogether. If the code taxes capital gains, then the capital gains of endowments should be taxed the same as the capital gains any person pays when selling real property or stock. Tax exemptions violate the equal treatment clause of the constitution.
I agree with you on everything you said! But, I might even take it one step further, why are churches not taxed?
lynna3826f2fcd8-See my note. I think all churches should be taxed, including my own. Tax exempt should disappear from the tax code.
The groups “educated” by Harvard are the ones who wanted us locked away in our homes, forced us to look through glass at our dying loved ones, demonized anyone who questioned their “truth” (science), pushed for firing, homlessing, and extricating anyone who didn’t follow their mantra from society. They pushed for defunding churches that didn’t push their ideology, instead of the various Words of God(s).
I am not sorry for feeling that they should experience the shoe on the other foot. The indoctrination started with Harvard; let Harvard be the lynchpin where it all begins to fall apart.
/Rabble rabble.
As long as the higher education institutions and religious organizations receive favorable government treatment, they will be subject to political pressures. For instance, in August 2022, thirteen House Democrats signed and sent a letter to the IRS demanding the government investigate the tax-exempt status of a Christian religious organizations, the Family Research Council. There was very little said about this in the media. Jonathan, did you cover it? It should not be this way, but I have a hard time getting alarmed when the shoe is now on the other foot.
Well Professor, I have to disagree with you on this one, on policy grounds. But we can’t limit it to Harvard, Maybe not up to 21%, but maybe 10%. The resulting drop in income might perhaps force them to reduce tuition costs (as well as grossly inflated salaries) and move the needle away from trendy majors, such as gender studies if they want to maintain research. If we are serious about reforming higher education in this country, then drastic measures are needed, much like what Volcker and Reagan did to the economy in 1981. And if they can’t adapt, then maybe they should fold.
Don’t forget….Biden went after Grand Canyon University….tried to bankrupt it.
I rarely disagree with the Professor, but he just doesn’t get that there is a revolution going on in our country which is anti-American, anti-Semitic and anti-Freedom. We saw what they did with a little power. If they ever get the power they strive for, neither the Professor or we will be allowed to speak. It will be Europe 2.0. Harvard is a center and training ground of the left.
If it’s okay for States and cities to have to be monitored by the feds over racism for years, why do we (out money) have to pay Harvard for it? They are no different than any other group that takes U. S. money.
Trump has to prove that Harvard is actually violating student’s rights. They haven’t done that.
Trump’s actions are unlawful and a school full of very smart people are pushing back. Obvioiusly his threats will be challenged in court and it’s very likely the school will succeed.
I too am surprised at Prof. Hurley’s staunch defense of Harvard. regarding tax exempt status. I can’t think of any other time that I wasn’t on board with his viewpoint. He claims that denying tax-exempt status to Harvard will have broad negative impact on higher education. These Ivy Leagues and many other government funded colleges and universities are having broad negative impact on our country and its citizens. Hillsdale College takes no money from the government and is able to function well. Harvard has billions from leftie donors to rely on for indoctrination (certainly we can’t call it education).
For the last 20 years Harvard has gotten more arrogant and anti American. They have gotten themselves into a propaganda mill mode denying free expression. When forced to debate in the NAS they lost. Where it was once an honor to go there now it is shame. No more taxpayer money for them. Obey our laws.
“After Harvard refused to comply with demands from the Trump Administration, the President called for its tax-exempt status…”
What is funny is how Turley doesn’t discuss the practicality of Trump’s demands. He completely ignores them instead of debating whether they are reasonable or if they align with the free speech ideals he holds. He won’t discuss them because it will quickly become apparent that they violate Harvard’s free speech, academic freedom, and their rights as a private school to determine how they operate.
Turley conveniently avoids this because it will be obvious that Trump is the problem, not the school. He doesn’t want to be a target for MAGA nut jobs rage, and vindictivness. He wants to please his Fox News audience and Trump by being mildly critical of what is really an attack on a private school’s free speech rights, and exercise of academic freedom.
These madrassas of fanatic progressive ideology are free to spew their poison at their own expense, just not on my dime.
Your analogy is false, no one is shuttering them, just moving the cost of propaganda on to the shoulders of the propagandists.
Hey George, isn’t The View on right now? Shouldn’t you be getting your daily dose of Whoopi’s whoopies?
So, George, if as Turley posits, a democrat president somehow gets elected would you be perfectly ok with churches losing their tax exempt status? That is exactly what will happen if Harvard were to lose theirs. The term is “slippery slope”. You might want to think about the whole picture before you reflexively blame President Trump.
CROGNALE,
It will depend on what a church does to earn a revocation of their tax exempt status. Right?
Churches get their tax exempt status by not advocating for political positions. Things like promoting a candidate, or encouraging people how to vote, or demanding fealty to a particular political party. Those kinds of things do not align with the purpose fo a Church which is to worship and promote a particular religious belief.
If it is shown that a church deliberately violates the requirements of the exemption of course they should have their exemption revoked. It’s the law.
Trump is acussing Harvard and other schools of violating student rights without pointing out exactly what the violations are. It’s a requirement to revoke tax exempt status or freeze federal funding. Harassing jewish students and temporarily impeding their way to class is not a violation of civil rights. No student has a right to an education, it’s not a constituttional right. Race? Religion? What was the violation?
An inconvenience during a protest is not evidence of a pattern of civil rights violations. The violations have to be systemic and intentional. The Trump administration has not provided any evidence of that. All it has done is level accusations without proof that jewish student’s rights were violated. Protests were anti-semitic? How? Expressing criticsim of Israel’s policies against the Palestinians is not anti-semitism. Trump is using anti-semitism as a pretext to accuse any student or any protest as a violation of the law that is a best subjective.