Baala Shakya, Photography Editor

The U.S. House of Representatives passed legislation on Thursday that would increase the tax on Yale’s endowment investment income from 1.4 percent to 21 percent, if passed by the Senate. 

Shortly after, University President Maurie McInnis sounded the alarm to members of the Yale community, writing in a Thursday afternoon email that the newly passed legislation presents “a greater threat to Yale than any other bill in memory.” 

In her message, McInnis called on Yale students and affiliates to defend Yale from the federal government by urging senators to challenge the bill.  

“Today, I ask you to join me in defending the research that saves lives and keeps America competitive, the faculty who enrich minds and help us make sense of our complex world, and the students who keep our future bright,” McInnis wrote in the email.

The proposed tax, part of a Republican House proposal that President Donald Trump has called a “big, beautiful bill,” will be tiered depending on the size of a school’s endowment and enrollment, with a top rate of 21 percent. Like Yale, universities such as Harvard and Princeton fall into the highest tier, and their endowment investment income will be taxed at 21 percent per year.

The tax increase is expected to cost Yale $690 million a year, according to estimates by Phillip Levine, an economics professor at Wellesley College.

In her Wednesday message, McInnis outlined the potential scope of the proposed tax increase’s effect, stating that the endowment has enabled the University to provide  $564 million in financial aid for students across all schools, $432 million for “life-saving and groundbreaking” research and $415 million for faculty teaching and salaries — all this year alone.

The proposed tax increase on university endowments, which Trump had previously suggested could fund a free, nonpolitical online university called the American Academy, may serve as an enforcement mechanism to pressure institutions like Yale into adopting specific practices, Katharine Meyer, a fellow in the Governance Studies program for the Brown Center on Education Policy at Brookings, previously told the News.

In a July 2023 announcement, Trump suggested that he would increase university endowment taxes as president in an effort to “reclaim our once great educational institutions from the radical left.”

McInnis noted that Yale is “fortunate” to have a large endowment valued at $41 billion, which, she said, contributes to one-third of the University’s total revenue — a figure that is “far greater than tuition.”

The University’s endowment previously grew 5.7 percent for the 2024 fiscal year — up from an investment return of 1.8 percent last year — leading to a gain of $2.3 billion.

The House passed the legislation earlier in the day as part of a broader tax package. The measure must still clear the U.S. Senate, where it is expected to face significant debate and possible amendments before any final version is reconciled with the House.

As the bill heads toward the Senate chamber, McInnis called on students, faculty, staff and alumni to contact their congressional representatives and advocate against the endowment tax hike, emphasizing that the next few weeks will be critical to ensuring the bill does not become law. 

“We have a window to advocate for the importance of the research, scholarship, and teaching taking place at Yale and peer universities,” McInnis wrote. 

In the call for mobilization, McInnis urged the Yale community to share several key points with lawmakers, including the tax’s potential to reduce college affordability and the fundamental research that would weaken America’s competitive edge in science and technology.

In the message, McInnis also explained that she has been “working, alongside scores of other university presidents” to advocate against the endowment tax. She assured the Yale community that she will “not stop working” until the issue is “settled.”

Until now, Yale has stayed largely out of the crossfire of Trump’s punitive Ivy League funding cuts. In January, McInnis told the News that she has been responding to criticism of higher education by ramping up the University’s lobbying efforts in Washington and limiting her own public statements.

McInnis concluded her call to action by appealing to the Yale community to reflect on the institution’s value and to “make the case for what universities contribute and for what is at stake if we fall behind as a nation in education, research, and scholarship.” 

“Join me in sharing what Yale gave all of us and what Yale continues to give our country and the world,” she wrote.

The current 1.4 percent tax on the endowment of most private colleges was signed into law by Trump in 2017.

This is a developing story and will be updated.