May 12, 2008
Mankiw Moves Harvard
Harvard University economist Greg Mankiw resents an attempt by the Massachusetts House of Representatives to enact an annual tax of 2.5 percent on college endowments that exceed $1-billion. Massachusetts is home to nine universities with endowments that surpass the $1-billion level. According to The Wall Street Journal, such a tax would cost Harvard -- which has an endowment of $35-billion -- more than $840-million annually.
Mankiw flatly declares the proposed tax "one of the most pernicious ideas I have heard of late." And were the tax to pass he urges a radical course of action for his home institution: Create a satellite campus somewhere warm -- maybe Palm Springs? -- call it Harvard South, and transfer much of the endowment to the new campus. Harvard North should then begin to sell off land in Massachusetts, eventually making Harvard South the main campus. "If Massachusetts state lawmakers remain hostile, close Harvard North down entirely," Mankiw writes.
Richard Florida, who received some recent attention in the Nota Bene column of The Chronicle Review, likes Mankiw's idea: "If states and cities are willing to pony up billions for convention centers...and hundreds of millions in industrial incentives for factories, how much do you think they [might] come up with for a Harvard, or MIT, or Stanford, or Oxford relocation? Universities are already setting up foreign campuses. Trust me, it's just a matter of time until this game gets big."
Evan Goldstein | Posted on Monday May 12, 2008 | PermalinkComments
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I also like Mankiw’s idea, as long as Harvard gets any new home state to change its constitution to guarantee permanently favorable tax treatment. That wouldn’t happen in just any old “warm” locale, certainly not in high-tax, low-discipline California, for example, which is already home to a satellite campus of Carnegie Mellon, one of the former employers of Richard Florida. Incidentally, Florida is usually wrong about everything, so his endorsement may well be the kiss of death for the Mankiw Migration.
— S. Britchky May 12, 12:57 PM #
Oh dear! What would become of the Yale-Harvard football game?
— luigi May 12, 03:39 PM #
The tax proposal is outrageous. Where Harvard might be legitimately vulnerable, however, is in their indirect cost rate. With people like Teddy Kennedy running interference for them, that number might be abnormally high. (I have heard that it was, at least in the past.) Taxing endowment is confiscatory, but charging the government an abnormally high rate would be something that could be properly corrected.
— Observer May 12, 04:21 PM #
So why the bias toward “warm” states? I suspect North Dakota would be delighted to receive Harvard. I’d suggest siting it in my home town, Devils Lake.
— Don Langenberg May 12, 05:45 PM #
I like that—Harvard at Devil’s Lake. Or the Devil at Harvard’s lake.
— Mike May 12, 06:42 PM #
For centuries undergrads have wanted this. Relocate Harvard to SoCal. I suggest San Diego.
— H'09 May 13, 04:49 PM #
Instead of all the saber-rattling, why not make a token contribution in service to the MA state and then warn that if they cross that token line, Harvard would move south?
— S.V. Char May 13, 06:24 PM #
The atmosphere in most Harvard departments most closely resembles CIA agents at dinner parties in enemy lands. If you say any idea of any value at all to anyone else at Harvard, in 3 weeks it appears, published, by someone else’s grad students. Lunch conversations among faculty at Harvard are serious contenders for the most boring things about being alive. The supposed synergy of having faculty all together in one place is deeply attenuated by the culture of Harvard and the viscious competitive maleness of the people they hire (men and women). I suggest moving Harvard to all 50 states so lunches could be interesting as faculty talk about ideas to people not interested in publishing them in 3 weeks.
— Richard Tabor Greene May 15, 10:19 AM #