Endowment Tax Fairness Act

Summary#

This bill changes the Internal Revenue Code to raise the excise tax rate on investment income of private colleges and universities. It replaces the current 1.4 percent rate in section 4968 with a 21 percent rate. The change applies to taxable years beginning after the date the bill is enacted. Money collected from the higher rate is to be deposited in the Treasury general fund and used to reduce the national deficit and, after that, the national debt.

What it means for you#

• Private colleges and universities that pay the excise tax on investment income under section 4968 would face a higher tax rate (from 1.4% to 21%) for taxable years starting after enactment.
• Individuals and organizations not subject to section 4968 would not be directly affected by this change.

Expenses#

No publicly available information on estimated revenue amounts, costs, or broader fiscal effects is included in the bill text. The bill states collected revenue will be used to reduce the national deficit and then the national debt.

Proponents' View#

No publicly available information.

Opponents' View#

No publicly available information.