Trump Signs Spending Package Into Law, Imposing 8% Tax on Harvard’s Endowment Income

President Donald Trump signed into law a sweeping tax and spending package that significantly raises the federal excise tax on Harvard’s endowment income on Friday — a move that could cost the University more than $200 million a year.

The legislation, dubbed the “One Big Beautiful Bill,” raises the endowment tax rate from 1.4 percent to as high as 8 percent for the wealthiest private colleges and universities. The top rate applies to institutions with more than $2 million in endowment assets per domestic, tuition-paying student — a threshold Harvard exceeds by a wide margin.

The signing caps years of sustained political pressure targeting Harvard’s wealth. Since the tax was first enacted in 2017, lawmakers — primarily Republicans — have floated increasingly aggressive proposals to rein in what they characterize as excessive, untaxed endowment gains at elite universities. Until now, none had passed a chamber-wide vote.

The bill’s passage is not Harvard’s worst-case scenario — the 8 percent tax is less than half the rate originally proposed by the House. But under the new law, Harvard could still see a fivefold increase over its current tax burden under the 1.4 percent rate, which was set to expire at the end of this year.

With more than $2.9 million in endowment assets per student and a total endowment of more than $53 billion, Harvard is expected to fall into the highest tax bracket. The tax applies not to the endowment’s total value, but to its annual investment income — which totaled $2.5 billion in fiscal year 2024.

https://www.thecrimson.com/article/2025/7/5/big-beautiful-bill-endowment-tax/