(IntegrityPress.org) – Scott Hodge has some harsh words for colleges and universities: it’s time to tax them. Hodge is the president emeritus of the Tax Foundation, an independent tax policy think tank in Washington, D.C. Hodge took aim at the vast sums of income generated by universities and asked the question if it’s time to start taxing them like businesses.
Hodge lambasted the Biden administration for another $4.8 billion in student loan forgiveness impacting 83,000 Americans with debt, canceling roughly $60,000 per borrower. This brings the total amount of student debt canceled during the Biden administration to $132 billion.
The debt would be treated as taxable income, except the American Rescue Plan of 2021 placed exemptions on forgiven student loan debt through 2025. Hodge points out that some legislators have argued that all canceled debt should be immune from taxation.
Hodge added that the larger windfall is for universities and colleges who get to keep the funds. They get to walk away with $132 billion while being treated as nonprofits, despite their tendency to collect billions in income.
The Department of Education showed that private universities and colleges generated $237 billion in revenue for the 2019-2020 school year. After their expenditures were accounted for they had $14 billion left over. A business would call those funds profits. Public schools fared even better, they generated $428 billion in revenue and had a surplus of $104 billion after expenses. The total take across both private and public institutions was $665 billion and every penny was tax exempt.
The funds were generated by a combination of tuition payments, patent and broadcasting royalties, as well as ticket sales to sporting events. As schools, they aren’t taxed when it comes to property taxes, sales taxes, and state income taxes.
Hodge also points out that only 13% of revenue was generated by donations in 2019, highlighting that they don’t make the bulk of their money from charitable donations.
Copyright 2024, IntegrityPress.org