The Protecting Endowments from Our Adversaries Act would impose steep excise taxes on private colleges and universities with endowments exceeding $1 billion that invest in companies listed on federal security watchlists, including the Commerce Department's Entity List and the FCC's list of equipment covered by communications security rules. Specifically, the bill would levy a 50 percent tax on the acquisition value of such "listed investments" and a 100 percent tax on net income and gains from investments held for at least one year. The law would apply to private educational institutions only—not public universities—and would cover investments made directly or indirectly through pooled funds like mutual funds and exchange-traded funds. The tax would take effect beginning either the first calendar year after the bill's enactment or one year after the Treasury Department establishes the official list of restricted companies, whichever comes first, though investments acquired before that deadline would be grandfathered in.
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