U.S. Universities Propose Spending Increase to Avoid Hefty Tax Hike

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Jun 07, 2025

Major U.S. universities are proposing an alternative to Congress to avoid a significant tax increase by pledging to increase their own spending. The current tax reform plan, passed by the House last month, includes a substantial 21% annual tax on investment income for the wealthiest schools, a sharp rise from the current 1.4% rate. This change could lead to an increase of hundreds of millions of dollars in annual taxes for many institutions.

The proposed tax hike is part of President Trump's tax bill, which aims to hold "woke elitist universities" more accountable. In response, these universities are offering to boost their spending as a means to mitigate the potential financial impact.

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