May 11, 2008 02:27 am Massachusetts legislators are on a taxation binge that threatens much of the progress made in recent years in rolling back the state's "Taxachusetts" label. Last week, the state Senate passed a massive increase in taxes on businesses and boosted the tax on cigarettes by $1 per pack. House versions of the same bills passed last month. The two versions of the bills must be reconciled before moving to the governor for his signature. The bills amount to nearly a half-billion-dollar tax increase, the largest in six years. The plan to close so-called corporate tax "loopholes" will raise $297 million. Of course, what legislators call "loopholes," other observers would call "paying one's taxes according to how the law is written." The tax hike on cigarettes will push the price per pack over $6 and raise $175 million. On top of those increases, the Legislature is now considering a spectacularly bad idea: taxing university endowments. The Legislature is looking at imposing a 2.5 percent annual tax on university endowments greater than $1 billion. The tax would rake in more than $1 billion a year in new revenue to meet lawmakers' insatiable spending demands. Universities, as nonprofit organizations, pay no local property taxes or state income taxes on their basic operations. They are, however, taxed on any profit-making ventures in which they are involved. University endowments are the total of donations to those institutions collected over the years plus any earnings on investments made with that money. Universities spend money from their endowments to support programs, research, scholarships and other functions. The tax under consideration would hit nine Massachusetts colleges and universities including Harvard, which has the nation's largest academic endowment at $34 billion, the Massachusetts Institute of Technology, Tufts University, Boston College, Boston University, Amherst College and Smith College. The motivations behind the idea of taxing university endowments are nothing more than greed and jealousy. Legislators are hungry for cash to support a state budget that stands at $28 billion and rising. Having already put the arm on two easy targets in corporations and smokers, they're now looking at the next large, untapped pile of cash. Consider the philosophy behind the words of state Rep. Paul Kujawski, D-Webster, who proposed the university tax. Kujawski told a Boston newspaper that it's "mind-boggling" not to tax an institution that has $34 billion while other people "can't afford to live." It never occurs to Kujawski that one has nothing to do with the other. How much money Harvard possesses has no effect on ordinary citizens struggling to make ends meet. It is simply a matter of jealousy — Harvard has something that others do not and the representative aims to penalize the university for it. Massachusetts' college and universities are a boon to our state. They and the research they support are of enormous benefit to our economy. To tax them as punishment for their success and to feed a free-spending Legislature's whims is unconscionable.
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