Endowment Tax Fairness Act
Sponsored By: Representative Nehls
Introduced
Summary
Raises the excise tax on large private college and university endowments. This bill would hike the tax on eligible endowment net investment income from 1.4% to 21% and direct the added receipts into the Treasury general fund to first reduce the federal deficit and then the national debt.
Show full summary
- Private colleges and universities that meet the bill's thresholds would face a much higher excise on endowment investment income. The rule applies to institutions with at least 500 tuition-paying students and endowments of at least $500,000 per student.
- Federal finances would get new dedicated revenue. Collections from the higher excise are to be deposited into the general fund and used to reduce the national deficit and then the national debt.
- Tax administration would follow existing Internal Revenue Code rules. The higher rate would apply to taxable years beginning after enactment and does not create new tax authorities.
*Would increase federal revenue and direct it to reduce the federal deficit and then the national debt.*
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 1 benefits, 1 costs, 0 mixed.
Higher tax on college endowments
If enacted, private colleges and universities would pay a 21% excise tax on their net investment income. That is up from 1.4%. It would apply to taxable years that begin after the date of enactment. This could raise federal revenue and could lead schools to change tuition, financial aid, or hiring.
Endowment tax revenue to cut deficit
If enacted, money from the higher endowment tax would go to the Treasury’s general fund. The government would use it first to reduce the deficit, then to reduce the national debt. The revenue would come from taxable years beginning after enactment.
Sponsors & CoSponsors
Sponsor
Nehls
TX • R
Cosponsors
Rep. Boebert, Lauren [R-CO-4]
CO • R
Sponsored 1/15/2025
Rep. Gill, Brandon [R-TX-26]
TX • R
Sponsored 3/3/2025
Rep. Jackson, Ronny [R-TX-13]
TX • R
Sponsored 3/18/2025
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov