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TaxBuzz Top 5 - College Endowment Tax Sparks Financial Aid Concerns, Sentencing Occurs in $9 Million Pandemic Tax Scam & More

by
Rebekah Barton
on
8/8/2025
TaxBuzz Top 5 - College Endowment Tax Sparks Financial Aid Concerns, Sentencing Occurs in $9 Million Pandemic Tax Scam & More

Each Friday, TaxBuzz brings you the top five tax and accounting headlines you need to know from the workweek. We know life can get busy and you don't always have time to scroll through your news feed to stay informed.

We weed through all of the week's stories to showcase the most important updates in the tax and accounting world.

1. College Endowment Tax Surge Sparks Financial Aid Concerns

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Credit: Marcio Silva/Getty Images

A newly enacted tiered tax on university endowments, part of the sweeping "One Big Beautiful Bill" signed by President Trump, is poised to hit wealthy private colleges with significantly higher levies starting in 2026. Institutions with over $2 million in assets per student will face an 8% tax on endowment investment earnings; those between $750,000 and $2 million will pay 4%, while schools with $500,000 to $750,000 remain at the original 1.4% rate.

Top-tier universities like Yale, Stanford, MIT, and Harvard are bracing for the financial impact. Rice University expects its tax bill to climb from about $3.7 million to $10.1 million, potentially equivalent to funding over 100 student aid packages. With reductions in federal research grants and increasing operating costs, institutions warn that these tax increases may prompt hiring freezes, layoffs, and cutbacks in student scholarships.

Broader proposals advanced in the House Ways and Means Committee last month seek to raise the endowment tax rate even more—up to 21%—and expand its reach. Critics, including advocates for higher education, label this the "scholarship tax," arguing it penalizes institutions that support low-income students.

2. Map Shows Where Property Tax Repeal and Reform Movements Are Heating Up Across the U.S.

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Credit: ntzolov/Getty Images

Newsweek has crafted an interactive map showcasing the intensifying movement to repeal or reform property taxes—especially in deeply red states where homeowners are pushing back against rapidly rising tax burdens. Analysts note this is the most widespread property-tax revolt since the 1970s.

Currently, the lowest property tax states include Hawaii, Alabama, Colorado, Nevada, South Carolina, Arizona, Delaware, Idaho, Utah, and West Virginia, with effective rates under 0.6% of home value. At the other end of the spectrum, New Jersey, Illinois, Connecticut, New Hampshire, Vermont, New York, Texas, Wisconsin, Nebraska, and Iowa have some of the highest property tax rates. For instance, New Jersey’s effective rate places the median homeowner's annual bill near $6,770.

Meanwhile, rising home values and diminished commercial revenue have intensified property taxes as a share of local budgets—now accounting for nearly 27.4% of all state and local tax collections, and up to 70% of local tax revenue in many places.

Mounting discontent is fueling legislative activity in states like Florida, Iowa, Kansas, and North Dakota—a sign that property tax reform may be on the ballot in the near future. Property taxes are a growing flashpoint. As homeowners nationwide push back against rising burdens, some states are beginning to question or even dismantle the long-held tax model—spurring a reform movement that shows no signs of slowing down.

3. Delaware Tax Adviser Sentenced for $9M PPP Fraud Scam

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Credit: designer491/Getty Images

A Delaware tax adviser, Jady “Jay” Solano, has been sentenced to six years and eight months in federal prison for orchestrating a massive $9.1 million Paycheck Protection Program (PPP) scam during the COVID-19 pandemic. Solano, who ran a tax preparation firm and often flaunted a leased McLaren sports car, targeted federal relief funds with the help of cohorts who operated dozens of shell companies.

Starting in 2021, news network WHYY reports, Solano recruited individuals nationwide through a Facebook group, guiding them in submitting fraudulent PPP applications—including hiring phony employees and falsified W-9 forms. He took at least 10% of the loan proceeds from each fraudulent claim and personally pocketed $1.3 million.

Delaware’s Acting U.S. Attorney lauded the sentence, calling it a rejection of Solano’s "brazen lies," while the head of the FBI’s Baltimore office condemned how he exploited trust "over and over again."

Six other individuals connected to the scheme have been indicted nationally, including one who received 18 months in prison for extracting nearly $300,000. This case showcases Justice Department’s resolve to clamp down on pandemic-era fraud that drained critical aid intended for struggling small businesses.

4. Workers to Get $1,400 Tax Cut on Overtime Under New Federal Provision

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Credit: Vithun Khamsong/Getty Images

A key provision in the newly passed “One, Big, Beautiful Bill” grants a $1,400 tax cut to hourly workers by exempting overtime pay from federal taxation, aimed at boosting take-home income and revitalizing America’s manufacturing sector. (Effective Jan. 2026.) This move builds on promises to prioritize working-class Americans and follows broader tax reliefs such as tip exemptions and Social Security tax cuts, reports the House Ways and Means Committee.

“No tax on overtime is another way that President Trump and Republicans in Congress are standing up for working men and women,” said House Ways and Means Chairman Jason Smith, highlighting its impact on linemen, welders, and police officers putting in extra hours. The bill is projected to increase take-home pay by nearly $11,000 annually, helping families grapple with a 21% surge in consumer prices.

At a recent hearing in Las Vegas, manufacturing workers praised the change. Nevada paint foreman Eric Byington remarked, “I wake up at 4 AM... Now you’re rewarded. You’re working weekends. You’re rewarded.” While geared toward empowering blue-collar households and filling factory jobs unlocked by Trump’s growth and trade policies, critics warn this federal move could potentially strain payroll systems and disproportionately benefit overtime-heavy professions.

5. Think Tank Warns UK Tax Hikes Likely This Autumn

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Taxes in the United Kingdom may need to rise this autumn if Chancellor Rachel Reeves is to meet her self-imposed borrowing rules, according to the National Institute of Economic and Social Research, the BBC reports. The think tank estimates the government is on track to miss its target by £41.2 billion, urging a “moderate but sustained” increase in taxes, potentially through council tax reform, expanding the scope of VAT, altering pension allowances, or prolonging the freeze on income tax thresholds.

Reeves has pledged that day-to-day spending will be funded by tax revenue and that national debt must fall as a share of GDP within five years—rules she has called “non-negotiable.” While Labour’s manifesto promised not to raise income tax, VAT, or national insurance for “working people,” Niesr warns that major tax increases may be unavoidable without breaking borrowing limits.

Prime Minister Sir Keir Starmer defended the government’s handling of the economy but stopped short of ruling out tax rises in the upcoming Budget, which is expected to be the most significant of this parliament.

For American travelers, potential UK tax hikes could have ripple effects—higher VAT or tourism-related taxes might increase costs for hotels, dining, and attractions. Changes to economic growth and investment patterns could also influence exchange rates, affecting the purchasing power of U.S. visitors.

Which headline this week most interests you?

Feature Image Credit: Kevin Fleming/Getty Images

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Rebekah Barton

Rebekah Barton

Rebekah's search engine optimization career began completely by accident as a college student. Over the course of her career so far, she has "grown up" with the SEO industry, from writing content while juggling classes to managing her own teams of writers and overseeing SEO strategy in subsequent roles. She is excited to bring her passion for high-quality content to CountingWorks, Inc.

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