Freezing Harvard’s federal funding is one thing; stripping its tax-exempt status is quite another.
President Donald Trump drew screaming headlines in recent weeks by cutting off the federal spigot to the nation’s most prestigious institution of higher learning. Harvard University felt the wrath of the man on a mission in the White House, with Trump announcing on April 15 that he will freeze a whopping $2.2 billion in grants and $60 million in contracts to the Ivy League behemoth. And while that was undoubtedly a decision of great consequence, what he did next promises to shake the very foundations of academia across the land.
But first, to the matter of cutting off federal funding, what’s the big deal, you might ask. Harvard may have refused to do enough to quash open antisemitism on its campus and continues to severely limit viewpoint diversity and open discourse, the basis for Trump’s decision. But the university will almost certainly continue to receive massive contributions from its predominantly liberal alumni who have over time built the largest-in-the-nation endowment to a jaw-dropping $50 billion, right? Well, not so fast.
After Harvard defiantly refused to heed the president’s warnings in the face of huge cuts to its taxpayer-funded largesse, Trump was not content to let the issue go. On May 5, he upped the ante and lowered the boom in a post on Truth Social: “We are going to be taking away Harvard’s Tax Exempt Status. It’s what they deserve!” This means contributions to the university could no longer be written off as a tax deduction, which would substantially shrink Harvard’s legendary financial base. And if that wasn’t onerous enough, the Department of Homeland Security has threatened Harvard’s capacity to enroll international students, who make up more than one-quarter of its student population. This would further erode the school’s income, as many students from abroad are able to pay the full tuition and are not in need of financial aid.
While all this is aimed at one particular university, the effect of such decisions could be seismic, sweeping up other institutions that, in Trump’s view, have insufficiently committed to reverse naked left-wing bias and continue to threaten the free speech of conservatives.
Harvard has punched back, suing the administration for the freeze, arguing that it violates free speech and federal law. Then, in a statement decrying the president’s threat to strip the university of its tax-exempt status, a spokesperson stated, “Such an unprecedented action would endanger our ability to carry out our educational mission. It would result in diminished financial aid for students, abandonment of critical medical research programs, and lost opportunities for innovation. The unlawful use of this instrument more broadly would have grave consequences for the future of higher education in America.”
No doubt, this promises to be a showdown for the ages.
It Will Take More Than the Stroke of a Pen
Indeed, not only Harvard but also academia writ large may have a lot on the line in this showdown. If Harvard loses the fight to retain its tax exemption, other universities might well believe they could be the next target of an emboldened president out to reverse the course of history. It would mean they would be motivated to either straighten up and fly right in Trump’s eyes or risk becoming collateral damage in the new normal with more exhaustive standards. Even the most controversial accredited colleges and universities have been granted non-profit status for as long as they have existed, but if Harvard is unsuccessful at fending off the 47th president, the long-standing rules will have changed.
However, removing Harvard’s non-profit status is not a simple matter. It will require a decision by the Internal Revenue Service, the government entity that determines which organizations are eligible for tax exemptions based on their educational mission, research, and public service. Federal law prohibits the president or any federal official from directly or indirectly ordering the IRS to conduct or terminate an audit or investigation. But ABC News reports that its sources say the IRS was actively considering revoking Harvard’s tax-exempt status before Trump’s explicit post on social media.
Harvard and the Business of Politics
Many decisions made by government agencies or courts are not based on explicit instructions from the president but on the publicly expressed positions of the chief executive — or leaders of the opposition. For example, when Joe Biden told donors that he wanted to place a “bull’s-eye” on Trump, he did not need to specifically instruct the Department of Justice or left-wing prosecutors around the nation to indict his enemy. Special Counsel Jack Smith, New York Attorney General Letitia James, and Manhattan District Attorney Alvin Bragg got the message, knowing Biden would be pleased if they tried to send Trump to prison. On the other hand, if Biden had publicly stated a desire for prosecutors not to pursue legal warfare against Trump, it seems likely that four separate indictments of the 45th-turned-47th president would not have been forthcoming. This is how politics works.
The judges stalling Trump’s deportation agenda do not need a phone call from Senate Minority Leader Chuck Schumer to do their part in throwing up roadblocks to the president deporting criminal aliens. It may not be explicitly ordered, but it is implicitly accepted. For example, Barack Obama’s Attorney General Eric Holder once said the quiet part out loud, describing himself as “the president’s wingman,” thus putting the lie to the notion that the DOJ is truly the independent, nonpartisan agency it is supposed to be. Presidential appointees can, and often do, act on a president’s public or even private declarations about his objectives without prompting. The IRS is well aware of Trump’s desire to strip Harvard of its tax exemption and can decide to follow through on his social media post without specific instructions from the president or his advisers.
Conservatives have been complaining for decades about Harvard and other Ivy League and elite institutions such as Princeton, Yale, and Stanford, which they believe are more engaged in left-wing indoctrination than education, in teaching their students what to think instead of how to think. Until now, the only way to change things was to castigate them publicly and try to persuade donors to cease and desist. But as with so many other issues, Donald Trump is now prepared to do what no other politician would have the chutzpah to attempt. Harvard University knows just how much is at stake and will most assuredly fight with all its might in what amounts to a death match with the president of the United States.
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