Trump to strip Harvard's 'tax exempt status'| What does it mean for Ivy League?

Amid the ongoing row between US President Donald Trump and Harvard University, Trump has now announced to strip the Ivy League institution of "tax-exempt status", on Friday (May 2). 

This is the latest attack by the US administration aimed at the prestigious Harvard University. 

“We are going to be taking away Harvard’s Tax Exempt Status. It’s what they deserve!” Trump posted on Truth Social. 

Although, the US president did not provide a timeline for when it will be enforced.

 

Trump had earlier ordered to cut $2.2 billion in federal funding to Harvard, a move the school sued the administration for. 

Last month also, Trump warned that Harvard should lose its tax-exempt status and be taxed as a political entity, if it keeps pushing political, ideological and "terrorist-inspired/supporting Sickness"

"Remember, Tax Exempt Status is totally contingent on acting in the PUBLIC INTEREST!," he added. 

However, the university has said that the Trump administration has no legal basis to take such an action. 

Trump has been wanting to take away Harvard's tax exempt status ever since it refused to comply with his administration's demands. 

The long list of Trump's demands includes broad government and leadership changes, and audits of how diversity is viewed on the campus. It further wants the university to eliminate its diversity, equity and inclusion (DEI) programs, and ban masks at campus protests. 

Until now, no such prestigious university has ever had its tax-exempt status revoked due to political reasons. 

Harvard spokesperson Jason Newton said that the Trump administration has "long exempted universities from taxes in order to support their educational mission" and that there was no legal basis to revoke its status. 

"The tax exemption means that more of every dollar can go toward scholarships for students, lifesaving and life-enhancing medical research, and technological advancements that drive economic growth," he said.

He added that revoking the university's tax-exempt status "would endanger our ability to carry out our educational mission." 

It would further result in diminished financial aid for students, abandonment of critical medical research programs, and lost opportunities for innovation. 

"The unlawful use of this instrument more broadly would have grave consequences for the future of higher education in America," he added.