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The U.S. House of Representatives passed a sweeping Republican-backed tax and spending bill Thursday that would impose a 21 percent tax on Harvard’s endowment returns — the latest in a series of federal measures inflicting harsh financial penalties on the University.

The bill, officially titled the “One Big Beautiful Bill,” cleared the House by a single vote, 215–214, after weeks of GOP infighting and a marathon overnight floor session.

Spearheaded by President Donald Trump and House Speaker Mike Johnson (R-La.), the legislation proposes a dramatic increase in the federal excise tax on large private university endowments — raising the rate from 1.4 percent to as much as 21 percent for institutions with endowments exceeding $2 million per domestic student.

Harvard, with a $53.2 billion endowment and a per-student endowment of $2.9 million, would face the highest tier of taxation under the bill. Based on the University’s most recent financial returns of $2.5 billion in fiscal year 2024, Harvard would owe hundreds of millions of dollars in annual taxes on endowment earnings if the bill becomes law.

It would be one of only nine institutions in the highest tier, which includes Princeton, Yale, MIT, Stanford, Caltech, Juilliard, Amherst, and Pomona.

The tax would disproportionately impact University programs funded by the unrestricted funds that make up about 20 percent of Harvard’s total endowment, primarily supporting financial aid, research, faculty hiring, and critical operations like building maintenance.

The current 1.4 percent excise tax was first enacted in 2017 under the Tax Cuts and Jobs Act — legislation signed by Trump during his first term — and was strongly opposed by Harvard at the time. Then-President Drew G. Faust said she was “deeply concerned” it would hurt research and student support.

Over the past few years, calls to hike the endowment tax even further have gained political momentum, leading University President Alan M. Garber ’76 to call an endowment tax increase “the threat that keeps me up at night” at a faculty meeting last year.

Congressional Republicans — including Vice President J.D. Vance during his tenure as a senator — had proposed an increase in the endowment tax on private universities several times in the past three years. But none had gone up for a House-wide vote until Thursday.

Harvard spent $230,000 on federal lobbying in the first quarter of 2025 — the highest total since 2008 — on issues including student visas, endowment taxation, and research funding.

Raising the endowment tax is just one of several cudgels Republicans in Washington can wield to financially penalize Harvard. Since February, the White House has frozen nearly $3 billion in federal funding, the IRS has begun making plans to revoke Harvard’s tax-exempt status, and on Thursday, the Department of Homeland Security rescinded Harvard’s ability to enroll international students — a major source of revenue for the school.

University spokesperson Jason A. Newton wrote in a February statement that “raising the endowment tax would inflict harm directly on our students and faculty – it would diminish our institutional capacity to support financial aid and research, and it would impair our ability to hire and retain faculty.

In a Thursday afternoon email to Yale affiliates, Yale President Maurie McInnis warned that the legislation poses “a greater threat to Yale than any other bill in memory.” She urged students, faculty, and alumni to mobilize by contacting senators and advocating against the measure.

The bill now moves to the Senate, where a divided Republicans caucus hold a narrow majority and are expected to take up the measure as early as next week.

Several Republican senators have said they would like to see significant changes to the bill before voting for it but Treasury Secretary Scott Bessent has said the final bill must be passed by the end of July to avoid a debt default.

—Staff writer Avani B. Rai can be reached at avani.rai@thecrimson.com. Follow her on X @avaniiiirai.

—Staff writer Saketh Sundar can be reached at saketh.sundar@thecrimson.com. Follow him on X @saketh_sundar.