The Trump 2025 campaign has announced its endorsement of a university endowment tax targeting elite institutions such as Harvard University. The campaign cites concerns over admissions bias, diversity, equity, and inclusion (DEI) programs, and campus protests. This announcement was made through a press bulletin.
According to Forbes, the proposed tax targets institutions with large, untaxed investment portfolios that have grown beyond their educational missions. It would apply to schools with endowments exceeding $500,000 per student and could increase up to 21% for those with more than $2 million per student. This bracket is dominated by Ivy League schools like Harvard and Princeton. The initiative reflects growing bipartisan frustration with perceived elitism, fiscal hoarding, and political radicalism in higher education institutions that enjoy tax-exempt status.
As reported by The Wall Street Journal, Harvard's endowment reached $50.7 billion in 2023, generating over $5 billion in annual investment returns. Most of these returns remain tax-free. Critics argue that these funds are used less for education than to entrench privilege and ideology, citing admissions preferences for donors' children and significant investment in DEI programs. The Trump administration recently revoked over $2 billion in federal funds to Harvard, indicating its belief that such institutions have strayed from their public obligations.
The initial endowment tax introduced in the 2017 Tax Cuts and Jobs Act applied a modest 1.4% levy on net investment income for roughly 40 universities. However, new proposals would increase the rate and focus specifically on institutions shown to be out of step with public expectations—particularly regarding merit-based admissions and campus discipline. According to Forbes, the revised tax structure would exempt endowment income used for scholarship aid, providing compliant universities a path to reduce their tax burden.
