December 20, 2017
To: Members of the University Community
From: Robert J. Zimmer, President, and Daniel Diermeier, Provost
Subject: Update on Federal Tax Bill
Date: December 20, 2017
In the last month, the University of Chicago has joined universities across the nation in opposing provisions of a proposed federal tax bill with the potential to undermine our capacity to support research and the education of our students. Today the U.S. House of Representatives passed a final version of the bill, which has a range of implications. The final version of the bill excludes some proposed changes to existing law that would have been very problematic for higher education, but maintains other changes that are unfavorable.
Among the positive changes, Congress removed a provision that would have imposed a tax on tuition waivers for graduate students, retained the existing tax deduction for student loan interest which earlier versions of the tax bill had proposed eliminating, and rejected a proposed new tax on tuition benefits for faculty, staff and their dependents. The removal of these provisions was a very important change that the University supported.
On the other hand, the final bill retains some provisions that the University opposed, including a new tax on endowments at certain nonprofit private universities. This new tax will have a negative effect on the ability of universities to make vital, long-term investments in education and research. There are also changes to the tax law with uncertain impact on philanthropic giving, which is crucial to the ability of universities to provide financial support for education and research.
The University will continue to advocate vigorously for our mission of research and education, and on issues that directly affect higher education. We would like to express our thanks to all of you who have contributed to the discussion and activity around these important questions of public policy.