Trump Threatens Harvard's Tax-Exempt Status Over Academic Freedom Dispute

In a significant escalation of tensions between the Trump administration and Harvard University, Donald Trump has threatened to revoke the university's tax-exempt status. This move comes after Harvard refused to comply with federal government demands, asserting that such compliance would infringe on academic freedom and the autonomy of higher education.

Trump, in a post on Truth Social, stated that if Harvard continues to promote what he described as "sick" behaviors inspired or supported by terrorism, the university's tax-exempt status should be revoked, and it should be taxed as a political entity. He emphasized that tax-exempt status is contingent on serving the public interest.

Harvard's tax-exempt status provides numerous benefits, including exemption from traditional property taxes on its teaching buildings. The university can also issue bonds free from federal interest taxes, which helps attract investors and lower borrowing costs. Donors receive tax deductions for contributions to Harvard, and the university benefits from significant tax advantages, estimated to be at least $4.65 billion in 2023.

The decision on whether a nonprofit organization retains its tax-exempt status is made by the Internal Revenue Service (IRS). Organizations can lose this status if they engage in political campaign activities, are overly active in lobbying, or have excessive income unrelated to their core mission. Failure to file annual reports with the IRS can also result in the loss of tax-exempt status.

Following Harvard's refusal to meet the government's demands, the Trump administration's anti-Semitism special working group announced the freezing of at least $22 billion in multi-year funding to the university. Additionally, funding to Columbia University, Princeton University, Northwestern University, and Cornell University has also been frozen, with a review underway for approximately $90 billion in funding and support projects for Harvard.

Harvard, one of the oldest and wealthiest universities in the United States, has long been a target of Republican criticism due to its perceived liberal bias and policies on recruitment and admissions. Since the Hamas attack on Israel in October 2023, which sparked the Gaza conflict, student protests in support of Palestine have surged across U.S. campuses, drawing the attention of the White House.

Harvard had previously expressed a willingness to cooperate with the government to address anti-Semitism on campus, such as tightening disciplinary measures. However, Harvard's president, Alan Garber, took a firmer stance, stating that the government's demands have crossed the line of academic freedom and the independence of higher education.

Garber highlighted that the government's demands have increased, including the elimination of Diversity, Equity, and Inclusion (DEI) programs, adjustments to admissions and hiring policies, and restrictions on the "power" held by certain students, faculty, and administrative staff based on their ideological positions. Garber wrote on Harvard's official website, "The government's intent is not to work cooperatively and constructively with us to address anti-Semitism. While some of the government's demands are aimed at combating anti-Semitism, most are actually direct government interference in Harvard's intellectual environment."

Harvard University has not yet responded to requests for comment on Trump's post.