Colleges are tax-exempt because higher education is assumed to be a public service, bur that assumption is worthy of scrutiny.Colleges enable the inventions that fuel health care and the economy, but both are in ruins. America ranks last among peer nations in health (National Research Council, 2013, “U. S. Health in International Perspective: Shortened Lives, Poorer Health”) and the economy only serves the ultra rich. Median CEO pay, for example, exceeds $10 million/year, while the median full-time worker earns less than $42,000/year. College costs are bigger than ever and college graduates have smaller career prospects and bigger debts than ever. Where’s the public service? In every field, leaders are college graduates. And they exploit our environment and fray our social fabric for profit because that’s what they learned at alma mater. Colleges don’t feed the hungry, or shelter the homeless, or comfort the dying. They’re famous for sports, pomp, parties, and academics. Are these a public service? Colleges treat financial aid as charity. But aid just allows some smart, lucky poor kids to get rich along with the smart, lucky rich ones. It does nothing to diminish disparity. The only way to do that is to teach smart, lucky kids to share, but colleges don’t do that. If sharing were taboo, it could not receive less attention at college. There are no departments or professors or textbooks of sharing, and no one ever majors in the subject. Colleges owe the public a benefit that exceeds the amount of their tax-exemption. Let’s require colleges to publish annually the amounts of their tax-exemptions and public benefits. And let’s tax them to even the exchange.We might apply the same policy to all tax-exempt organizations, but colleges teach. If we ensure appropriate service from them, they’ll inspire other non-profits to follow. And if we set colleges free to compete, they’ll push each other to share more.Taxing colleges gives the public clout, as it can offer tax-relief for desired public service. A tax-break for banning tobacco or junk food, for instance, would reward colleges for protecting public health. Protecting our environment by encouraging conservation and recycling, or enhancing social responsibility by fostering use of Certified Fair Trade products might warrant additional tax-relief.It’s not the degree or the money it earns that matters, but only what students love and what they do for love. Let’s use tax to help them love better and do more public service.
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