I'm not at all fan of taxing assets (as opposed to income); in fact, I'm absolutely sure it's a very dangerous road to start down. But I'm also not a big fan of the rich disingenuously crying poor, and even less so when the rich have gotten that way by gaming the system.

Instead of the proposal on the table, I'd go another way: pass a law which requires all not-for-profit organizations spend 5% of their previous year's end liquid assets to retain non-profit status. If they fail to meet that mark, they become taxed as for profit organizations for four or five years, and they can only re-certify as non-profit if their average year-on-year liquid asset outlay was over the 5% mark during the penalty years.

I've never been a fan of democracy, and here is an exemplerary reason of why.

This is a cash grab no different from the land grabs of American history.

The whole concept disgusts me and I'm loathe to comment intelligibly on the subject.

Still it occurs to me -- you know what other non-profits have socked away lots of cash? Churches.

Memory is a strange bell, jubilee and knell.

I helped proof a book one of my undergrad professors wrote about the history of a small private university, and that gives me the background to sort of understand why a lot of schools sock so much away in endowments.  A lot of it comes out of the 1970s, which was a bad time for most private universities.  After World War II most schools had a big enrollment boost due to the GI bill, so they expanded.  Then the baby boomer generation got to college and they expanded more (the school the book was written about went from less than 500 students in 1950 to about 1500 students by 1968).  Then the Nixon recession hit and bad economic times persisted for over a decade, the baby boomers started to graduate from college, and then in the early 1980s Reagan cut federal money to colleges.  By the early 1980s a lot of private schools were in really dire financial straights, and many just plain went out of business.  This spurred a lot of schools to start fundraising like mad and socking that money away.  Even when enrollment picked up again in the late 1980s and 1990s and the economy came back to life and donations came pouring back in, the memory of the bad times persisted in the institutions (sort of like how your grandmother always kept some money buried in a jar in the backyard "in case the Depression comes again').  At some point in the last decade or so, though, things started to get out of hand and the reason for having the big endowments was, I think, kind of forgotten.  Having a big endowment became and end unto itself.  So, I think that at least in part some kind of corrective is needed, but at the same time we have to remember why this situation came about in the first place and realize that it's not completely crazy for a university to want to have a decade or more's worth of operating funds socked away.  I think gerrymander's idea is a good one - there should be some requirement to spend some funds to retain the non-profit status.  I don't know if it's necessarily a good idea to tie it to overall assets, though.  A better way to do it might be to tie it to net income for that year - that way you're not requiring the school to spend down its reserves if donations or enrollment should substantially decrease for some reason (such as the "perfect storm" that schools experienced in the 1970s/1980s).  The US still has most of the top research universities in the world - the system may need some reform, but we don't want to go fucking around with it too drastically.

I'm torn on whether it's right or wrong to attempt something like this, although a more conservative version of gerrymander's suggestion would in my opinion be the best way to go about it, if the state were to go about this. But I think this is irrelevant, as I doubt Harvard will really let it happen. My bet would be that legislators back off even though Harvard is almost certainly bluffing.

It is easy to buy small plaster models of what you think life is like.