President Trump announced Friday that Harvard University will be losing its tax-exempt designation.
“We are going to be taking away Harvard’s Tax Exempt Status. It’s what they deserve!” he posted on Truth Social.
This development follows the Trump administration’s recent decision to suspend $2.2 billion in federal grant money that had been allocated over several years. The suspension was in response to Harvard’s alleged failure to adequately address antisemitism and hate-related activity on its campus.
Earlier, Trump had suggested that Harvard’s continued promotion of “political, ideological, and terrorist inspired/supporting ‘Sickness?’” could place its tax-exempt status in jeopardy.
“Remember, Tax Exempt Status is totally contingent on acting in the PUBLIC INTEREST!” he warned.
Being tax-exempt allows universities like Harvard to attract substantial donations from wealthy benefactors looking for tax deductions, and ensures that the institution doesn’t pay income tax on its net earnings.
However, current federal law bars the president and other top government officials from ordering or halting any IRS audits or investigations.
The administration has yet to explain the legal justification it plans to use in order to revoke Harvard’s tax exemption.
Harvard has long benefited from its tax-exempt designation, helping it accumulate the country’s largest university endowment, now estimated at $53 billion. In the 2024 fiscal year alone, the school reportedly generated $2.4 billion in earnings from that endowment.
That endowment is crucial to the school’s financial operations, reportedly covering nearly 38% of its $6.4 billion annual budget. Additionally, $686 million in yearly federal funds comprise about 16% of its total budget.
Should Harvard’s tax-exempt status be revoked and its endowment earnings be taxed at the corporate rate of 21% instead of the current 1.4%, the school could face a $525 million annual loss in available funds.
{Matzav.com}