Space Ghost Emeritus

And FWIW I agree 100% that the current “pull your research grants” BS is outrageous. An idiotic spiteful own goal from an idiotic spiteful administration.

But IMO that is a different issue than “hyper-elite institutions should maintain their tax advantages no matter how wealthy they are.” 5/5

I get that the messenger SUCKS. But the message can be valid.

Replace “Harvard” with “GM” or “Amazon” and we would see it for what it is, special pleading from the 1%.

It might be worth it for society, positive externalities exist. But maybe that lost tax revenue does more good elsewhere.
4/x

People get why marginal personal income tax rates go up. Money’s got to come from somewhere, the richer you are the less you’ll miss it.

So why is it anathema to suggest that endowment gains from $40-50bn should be taxed at a higher rate than endowment gains from $0-10bn?
3/x

Is our societal interest literally “preserve the Harvards”? Or is it “strengthen US higher education in general”?

Might the US be better off if those billions were spread among more schools, instead of the tax code implicitly encouraging concentration in two dozen hyper-elite schools?
2/x

I get why Harvard wants to survive 400 years. That’s admirable. But how much should society as whole pay for that goal?

Is taxing a portion of its $50bn endowment gains at 14% instead of 1.4% really going to tip Harvard on to the disaster path?
1/x

I think this bill and the people behind it suck. But I also think it’s fine to ask why taxpayers should subsidize a massively rich institution that benefits a tiny percentage of the population.

Harvard can infinitely grow its endowment. But I don’t know why they need our help. 8/8

That tax break comes at a literal cost. These institutions insist on special treatment and I think it is warranted, to a point. I like higher ed!

But at some point, it’s just a hedge fund growing assets under management for its own sake. It’s not special. And it’s OK to ask them to pay more. 7/x

Was Harvard as an institution struggling back in 2000 with their $19bn endowment? Would they be crippled if they had to pay 14% capital gains tax over a certain threshold instead of 1.4% tax?

It’s not apocalyptic. It’s a reasonable question to ask - why can’t they pay what other funds pay? 6/x

Harvard can accept that the main purpose of its endowment is infinite growth. But why should society encourage that?

What greater social purpose is served by giving Harvard tax breaks to help grow their endowment to $50 billion? Could that potential tax revenue be used for something better? 5/x

So you’re right, they DON’T struggle to know what to spend it on. They spend 5% a year on activities and plow the rest back into the endowment. The rules of their endowment prioritize growing the endowment. That’s the way it was, is and always will be. That’s fine, they can do what they like. 4/x

From 2000-2024 the endowment increased by about 50%, inflation adjusted. Through it all, Harvard held its annual payouts at 5%, plus or minus. 3/x

Harvard's Endowment Harvard’s endowment, the University’s largest financial asset, is a perpetual source of support for the University and its mission of teaching and research. The endowment is made up of over 14,000 fun...

And then here’s Harvard in 2024, when the endowment was $52.4 billion, saying “Generally, the annual endowment payout rate is 5.0 to 5.5% of market value”

finance.harvard.edu/endowment

2/x

Fair enough. Here’s an article from The Harvard Gazette from 2000, when the endowment was a paltry $19.2 billion. “Historically, between 4 percent and 5 percent of the endowment is spent annually on Harvard programs.”

news.harvard.edu/gazette/stor...

1/x

IMO it’s completely reasonable to set a ceiling (based on the number of students you are actually educating) for how much money gets “tax-preferred educational institution” status. Above that level you are something else. And it’s not clear why that something else should be subsidized. 3/3

The resources the 25 or so hyper-elite schools have are so far over and above anything they need to run a school / research institution.

Harvard literally has trouble figuring out what to do with their endowment. So they just grow it. Can’t touch the endowment! 2/3

I dunno, this part is a real “Worst Person You Know Just Made a Great Point.gif” moment for me.

The wealthiest universities are hedge funds with schools attached. Is there a good reason that society should subsidize (through preferred tax treatment) Harvard amassing a $50bn endowment? 1/3

Honestly Trump’s sinking approval rating makes this gambit even more logical. The GOP assumes they will lose the House in 2026.

So smash and grab while they can and leave the other party to do the cleanup. 2/2

Yes. Also the implicit deal here is that the GOP gets to do unfunded tax cuts, running up the deficit and making it impossible for Dems to fund any nasty social programs.

And then when Dems try to raise revenue to dig out of this hole, the GOP will call them Tax and Spend Democrats. 1/2

The gerontocracy is a HUGE problem…but the GOP would have passed a bill very much like this regardless of how many Dems croaked.

The actual vote margin may be small, but it is stage-managed. Johnson can hand out “NO” passes to his angriest members. If he needed their votes, he would get them.

AI will be both transformative and vaguely disappointing. Like robots! 4/4

Can build a car. But can’t walk up the stairs.

That’s my mental model for AI. Flash forward 20 years it will be embedded in all sorts of tasks and responsible for all sorts on productivity gains.

But what it won’t be is Wintermute or ScarJo’s HER. 3/4

But that’s not exciting enough for these numbnuts. It has to be REVOLUTIONARY.

I think of AI like robots. Robots have transformed modern life. They’re amazing. Pretty much every manufactured thing - a robot did that.

But they aren’t are the sci-fi anthropomorphic buddies we were promised. 2/4

The AI triumphalism is annoying. I think there is a real, incredibly profitable business case for AI agents. It is “we can make a lot of tedious tasks 10-20% less annoying.”

That would be amazing! Businesses grind for a 2% productivity increase. 1/4

Does seem like all this will work itself out. It all seems very performative. The holdouts all have things they want, but nothing irreconcilable.

This feels like the shouting and table-thumping before the handshakes and smiles.

Honestly it’s not even that much table thumping.

“Check and CHECK.”

Times like this is might be helpful for the GOP to have a President who understood a damn thing.

OH WELL.

I know it is easy to doom and say “what can Congress even do?” But for most normal humans, the prospect of being grilled in public in front of cameras is a truly unpleasant experience. And officials will do things - like comply with laws - to avoid that.

I go with this. They are including stupid signaling stuff like this not to sneak it through, but because they assume it will be shot down in the Senate. It is cost-free messaging for them . “I tried, but that dastardly Senate…”

Also not be mean but seems like there’s a pretty decent chance Biden won’t be around much longer, making it even harder to care about all this hand waving - and much much easier to performatively throw Biden under the bus and move on.

Operation Warp Speed developed delivered over 200m doses of the Pfizer and Moderna COVID vaccines.

I know Trump himself didn’t do it. But for all his personal COVID idiocy, his admin did heavily push vaccine development, and they were ready by the end of 2020. Biden followed through with delivery.