‘Supporting Sickness’: Trump Threatens to Strip Harvard of Tax-Exempt Status for Defying Latest Demands
AP Photo/Alex Brandon
President Donald Trump escalated his war against Harvard University on Tuesday by threatening to take away the institution’s tax-exempt status.
Harvard announced on Monday it would defy Trump’s demand to end Harvard’s diversity, equity, and inclusion programs, ban masks at protests, and alter its hiring practices to limit the power of teachers “more committed to activism than scholarship.”
“No government – regardless of which party is in power – should dictate what private universities can teach, whom they can admit and hire, and which areas of study and inquiry they can pursue,” Harvard President Alan M. Garber said in a statement, adding, “The University will not surrender its independence or its constitutional rights.”
Trump punished the university for defying his demands by announcing the government would then “freeze $2.2 billion in multi-year grants and $60 million in multi-year contract value,” reported CNN.
Trump took that a step further, posting to social media, “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!”
Former President Barack Obama praised Harvard for standing up to the Trump administration on Monday, writing, “Harvard has set an example for other higher-ed institutions – rejecting an unlawful and ham-handed attempt to stifle academic freedom, while taking concrete steps to make sure all students at Harvard can benefit from an environment of intellectual inquiry, rigorous debate and mutual respect. Let’s hope other institutions follow suit.”
Tax-exempt status for colleges and universities means they do not pay federal income taxes on investment income, salaries, and other major sources of revenue and expenses. Harvard has the world’s largest endowment, at over $53 billion.
The federal tax code lays out the criteria for a tax exempt institution, “To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.”
