Monday, January 21, 2019
Politico, Congress Fumbles New Tax on Nick Saban's Paycheck:
A mistake in Republicans’ tax overhaul is allowing many state universities to escape a crackdown on highly paid executives.
Lawmakers inadvertently exempted public universities — though not private ones — from a new 21 percent tax they created on nonprofits that pay their employees more than $1 million.
There are hundreds of million-dollar employees on college campuses, many of them football and basketball coaches. Nick Saban, the University of Alabama football coach who ... lost his bid for a sixth national championship at the school, earned $8.3 million in 2018, according to USA Today, which tracks coaches’ pay.
Republicans are now trying to correct the snafu, though there is no sign that Congress will act anytime soon. In the meantime, the oversight is saving public universities millions in taxes. The levy is paid by the school, not the employee.
“Congress knows it screwed up,” said Paul Streckfus, a longtime expert on tax-exempt organizations. “If you’re a state university, this is a pretty nice deal.”
It is one of more than 70 glitches in the Tax Cuts and Jobs Act. It’s not unusual for there to be errors in major legislation, though critics say the 2017 law was rushed through Congress so quickly that it has an unusually large number.