Washington • Such is the federal government’s sprawl, and its power to establish new governing precedents, mere Washington twitches can jeopardize venerable principles and institutions. This is illustrated by a seemingly small but actually momentous provision of the Republicans’ tax bill — a 1.4 percent excise tax on the endowment earnings of approximately 70 colleges and universities with the largest per student endowments. To raise less than $3 billion in a decade — less than 0.005 percent of projected federal spending of $53 trillion — Republicans would blur important distinctions and abandon their defining mission.
Private foundations, which are generally run by small coteries, pay a “supervisory tax” on investment income to defray the cost of IRS oversight to guarantee that their resources are used for charitable purposes.