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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The Big Beautiful Bill Act is sometimes characterised as being regressive — slashing both taxes for the rich and medicaid for the poor.
We haven’t seen a better dataviz making this point than this one from Sam Fleming and Myles McCormick’s MainFT write up, charting the distributional impact of the Act:
But the Act wasn’t just about cuts to taxes and benefits. It also hiked taxes on well-heeled universities.
US colleges are endowed with serious money. In fact, according to the National Association of College and University Business Officers, they held over $860bn of assets at the end of 2024.
In Trump’s first term those with more than 500 students became subject to a 1.4 per cent tax on investment income. There was talk of this tax being jacked up to 21 per cent — with JD Vance advocating that it be hiked to 35 per cent. But in the end the BBB Act brought in a tax that is based on who they are, how big they are, and how big the endowment is.
Rather than write more words, we thought we’d convey the details through the medium of dataviz. Scroll away:
So as far as we can tell using data from the National Association of College and University Business Officers, it’s really Harvard, Yale, Princeton, MIT and Stanford that will get hit with the full 8 per cent tax.
By our calculations, endowment income at these five colleges accounts for an average 37 per cent of their income — though we’re not sure whether this figure is legally identical to the definition of investment income targeted by the tax.
How much money will this raise? Congress’s Joint Committee on Taxation reckons around $760mn over the next decade. And this cumulative 10 year tax haul will help pay for the overall BBB tax package.
Or at least 15 hours of it.
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