WASHINGTON — President Trump suggested Tuesday that Harvard University should lose its tax-exempt status — one day after his administration froze $2.2 billion in multiyear federal grants over the Ivy League school’s refusal to make changes to curb alleged antisemitism and overhaul admissions policies.
“Perhaps Harvard should lose its Tax Exempt Status and be Taxed as a Political Entity if it keeps pushing political, ideological, and terrorist inspired/supporting ‘Sickness?’” Trump wrote on Truth Social.
“Remember, Tax Exempt Status is totally contingent on acting in the PUBLIC INTEREST!”
Trump’s escalation could lay the groundwork for Harvard to face severe financial pain — as the administration uses the threat of federal action to compel changes at other prestigious institutions, including Columbia University, which has adopted a more conciliatory posture.
Harvard president Alan Garber on Monday refused to entertain policy changes demanded by the Trump administration to address anti-Israel sentiment that has allegedly veered into antisemitism and to eliminate diversity, equity and inclusion (DEI) programs.
“No government — regardless of which party is in power — should dictate what private universities can teach, whom they can admit and hire, and which areas of study and inquiry they can pursue,” Garber said in a defiant statement.
The administration had asked Harvard to reform student discipline rules, end all DEI programs and screen international students to “prevent admitting students hostile to the American values,” including “students supportive of terrorism or antisemitism.”
The demands also included changes to make admissions decisions based on merit alone and “cease all preferences based on race, color, national origin, or proxies thereof.”
The Cambridge, Mass., university has the largest endowment in the country — about $52 billion — from which it earned about $2.4 billion in fiscal 2024.
The endowment proceeds reportedly fund about 37.5% of Harvard’s $6.4 billion operating budget. Annual federal funding ($686 million) makes up 16% of the operating budget.
If the tax-exempt status was altered, the endowment income’s tax rate could soar from 1.4% to the standard 21% corporate tax rate — not accounting for deductions — potentially translating to a $525 million annual reduction in funds.
Howard Abrams, a visiting professor at Harvard Law School and corporate tax specialist, told The Post the actual theoretical reduction is unclear — in part because tuition could be considered taxable income, packing another punch to one of the world’s best-known schools.
“Salaries and other costs of running the University would be deducible,” Abrams added. “It’s not clear to me how financial aid would be treated.”
