(Bloomberg) -- Two U.S. congressmen introduced a bill Thursday to repeal an excise tax on college endowments that is expected to affect about 30 schools including Harvard, Yale and Princeton.
The bill was sponsored by John Delaney, a Democrat from Maryland, and Bradley Byrne, a Republican from Alabama. Byrne was among a group of legislators who signed a letter last year urging Congress not to include the tax in the overhaul passed in December. He’s a graduate of Duke University, one of the schools that may pay a 1.4 percent excise tax on annual investment income.
“America’s colleges and universities are one of our singular assets as a country,” Delaney said in a statement. “We lead the world in higher education and it gives us an incredible advantage in today’s high-tech, high-skill global economy. We should be leaning into these advantages, not undermining them.”
About 50 college presidents on March 7 sent a letter to congressional leaders asking them to “revisit this misguided policy.” Many of the schools are expected to pay the tax, including Grinnell, Smith and Williams colleges.
The tax is expected to raise about $200 million annually. Targeted schools have at least 500 students and more than $500,000 in endowment per student.
Delaney and Bryne currently are the only sponsors of the bipartisan bill.
About 800 college endowments hold about $500 billion in assets, led by Harvard, with $37 billion.
©2018 Bloomberg L.P.