Tom Cotton should go further: An endowment tax should not exclude big foundations

Fox News - Mar 31st, 2025

Pressure is mounting in Congress to address the perceived left-leaning bias of universities by increasing taxes on their sizable endowments. Arkansas Senator Tom Cotton has proposed a one-time tax targeting large endowments like those of Harvard and Yale, aiming to raise $16 billion. This proposal seeks to generate revenue without raising tax rates and responds to concerns about the ideological imbalance in higher education. Additionally, private foundations with substantial endowments, such as the Ford and Rockefeller Foundations, are under scrutiny for their progressive agendas, prompting calls for increased accountability and taxation.

The debate over taxing university and foundation endowments reflects broader tensions about wealth concentration and ideological influence in American society. With foundation assets reaching record highs, fueled by favorable investments and tax-advantaged contributions, there is growing concern about their impact on public policy and philanthropy. Proponents of endowment taxes argue that they could fund tax law changes to incentivize individual charitable giving, countering the effects of the 2017 Tax Cuts and Job Creation Act, which reduced the number of taxpayers itemizing deductions. As Congress deliberates on future tax policies, the role of major foundations and universities in shaping societal values and priorities remains a contentious issue.

Tax Policy Tom Cotton Jd Vance Brandon Straka Brianna Lyman University Endowments Private Foundations Charitable Giving

Story submitted by Fairstory

RATING

5.0

Moderately Fair

Read with skepticism

The article presents a timely and provocative examination of the taxation of large endowments and private foundations, highlighting their perceived political influence and advocating for increased taxation. While the article is clear and engaging, it lacks balance and transparency in its presentation of evidence and perspectives. The absence of citations and authoritative sources undermines its accuracy and credibility, limiting its potential impact and engagement with a broader audience. Despite these shortcomings, the article successfully raises important questions about wealth distribution and the role of philanthropic entities in society, contributing to ongoing public debates on these issues.

Accuracy

The story presents several factual claims that are partially verifiable. For instance, the claim that Senator Tom Cotton proposed a tax on large university endowments is accurate, as it aligns with his public statements and legislative efforts. However, the specifics, such as the exact amount the tax aims to raise ($16 billion), need verification. The story also mentions the endowment sizes of Harvard and Yale, which are generally accurate but require confirmation with the latest financial reports from these institutions.

The article states that U.S. foundation assets grew nearly $200 billion in 2023, which is a significant claim that needs backing from reliable financial data sources. Additionally, the piece asserts that foundations pay a minimal 1.39% excise tax on asset appreciation, a detail that is accurate but should be cross-referenced with IRS guidelines to ensure precision.

Overall, while the article provides a substantial amount of factual information, it lacks citations and specific data sources, which diminishes its accuracy score. The claims regarding the political leanings of foundations and their impact on society are subjective and require more nuanced evidence to be deemed fully accurate.

Balance

The article predominantly presents a viewpoint critical of large private foundations and university endowments. It highlights their perceived left-leaning political influence and suggests that they should be taxed more heavily. This perspective aligns with certain political ideologies but lacks a balanced representation of opposing views.

The article does briefly acknowledge the existence of right-of-center foundations, though it dismisses them as smaller and less influential. This inclusion does not adequately balance the narrative, as it fails to explore the positive contributions or counterarguments regarding the role of foundations in society.

Overall, the story could benefit from a more balanced approach by including perspectives from the foundations themselves or experts who may argue against increased taxation, thus providing a fuller picture of the debate.

Clarity

The article is generally clear in its language and structure, making it accessible to readers. It presents its arguments in a logical sequence, starting with the issue of university endowments and expanding to include private foundations.

The tone is assertive, reflecting the author's stance on the issues discussed. However, the lack of citations and specific data points can lead to confusion about the basis of some claims.

Despite these issues, the article effectively communicates its main points and is straightforward in its critique of the current tax treatment of large endowments and foundations. The clarity of the writing helps convey the author's perspective, even if the underlying evidence is not fully transparent.

Source quality

The article's quality is undermined by the lack of direct citations or references to authoritative sources. While it mentions public figures like Senator Tom Cotton and JD Vance, it does not provide direct quotes or links to their statements or proposals.

The absence of data sources for claims about foundation asset growth and taxation rates is a significant gap. Reliable sources such as financial reports, IRS publications, or statements from the foundations mentioned would enhance the article's credibility.

Without these sources, the reader is left to rely on the author's interpretation, which may introduce bias or misinterpretation. This lack of source transparency significantly impacts the article's reliability and lowers the score in this dimension.

Transparency

The article lacks transparency in terms of disclosing the basis for many of its claims. It does not provide information on how the data was obtained or the methodology used to arrive at certain conclusions, such as the proposed tax impact or the political leanings of foundations.

There is no mention of potential conflicts of interest or the author's perspective, which could influence the narrative. The article does not clarify whether the opinions presented are based on empirical evidence or the author's interpretation.

This lack of transparency leaves readers without a clear understanding of the underlying facts and assumptions, reducing the article's credibility and making it difficult to assess the validity of the arguments presented.