FOR IMMEDIATE RELEASE
Contact: James Arnold or Mary Collins Atkinson (202) 224-2353
May 11, 2021 

Cotton Introduces Bill to Tax Private University Mega-Endowments, Support Workforce Training Programs 

Washington, D.C. — Senator Tom Cotton (R-Arkansas) today introduced the Ivory Tower Tax Act, legislation to impose a one-percent tax on the value of the endowments of the wealthiest private colleges and use the funds to support vocational education and training. This bill also requires these institutions to draw down five percent of the value of their endowments each year. Bill text may be found here.

“Our wealthiest colleges and universities have amassed billions of dollars, virtually tax-free, all while indoctrinating our youth with un-American ideas. This bill will impose a tax on university mega-endowments and support vocational and apprenticeship training programs in order to create high paying, working-class jobs,” said Cotton.

The Ivory Tower Tax Act would:

  • Levy a one-percent tax on the fair market value of endowments held by the richest private colleges. The tax would apply to private colleges that 1) have more than 500 full-time enrolled students, 2) have endowments worth more than $2.5 billion and $500,000 per full-time enrolled student, 3) do not have a religious mission.
  • Generate an estimated $2 billion in revenue per year, which would be redirected to support vocational and apprenticeship training programs.
  • Require the richest private colleges to distribute at least five percent of their endowment to support their educational mission per year, or else face a penalty. This requirement mirrors the tax treatment of private foundations.

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