Education

President’s Remarks on Tax-Exempt Status

May 26, 1982 3 min read
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Following are the texts of two recent public comments by President Ronald Reagan on the subject of granting federal tax exemptions to schools that practice racial segregation.

The President’s initial response came during a question-and-answer session with students at Providence-St. Mel High School in Chicago during a visit to that city on May 10:

Q. Could you tell us about the last decision you made that didn’t get the results you expected?

A. Oh, wait a minute. I have a beaut I’d like to tell you about--(laughter)--yes.

I was under the impression and maybe I was wrong, I didn’t know there were any court cases pending. But I was under the impression that the problem of segregated schools had been settled--that we have desegregation. But I was getting complaints and even before I got here as President, I was getting complaints that some of the Internal Revenue agents, the tax collectors that collect the income tax, were harassing some schools even though they were desegregated--but harassing them and threatening them with taking away their tax exemption, which educational institutions have, if they didn’t, oh, set up scholarship programs or go out actively recruiting and take steps to try and increase their efforts at desegregation. And I didn’t think that this was the place of the Treasury agents to be doing this. So, I told the Secretary of the Treasury that I didn’t think that.

I think that as individuals we get harassed enough by the Internal Revenue collectors. And I didn’t know that here were a couple of legal cases pending. And all I wanted was that these tax collectors stop threatening schools that were obeying the law. And as it developed, this turned out that it was turned around and said that I was trying to provide tax exemptions for schools that still practiced segregation. I didn’t know there were any and that maybe I should have but didn’t. And it was a total turnaround of what I had intended with what I said to the Secretary of the Treasury.

So, I said, if that’s the case, let’s get some legislation up there and let the Congress pass it that makes sure that there are not desegregated schools or any segregated schools, I mean.

And, yes, that one went wrong and this is the first time anyone’s ever publicly asked me to try and explain what I was doing. I’m happy for the chance.

At a White House press conference three days later, a reporter asked the President clarify his response to the students:

Q. Why did you tell the students in Chicago that when you made the decision about tax exemptions for segregated schools you were unaware of court cases, since you had signed off on a memo which cited such cases? And secondly, can you explain why you said you did not know there still are segregated schools?

A. Well, as I said, maybe I should’ve. I just thought that that had been, that question had been resolved for quite some time, that desegregation was a fact of life. And the letter that you say I signed off on--that was the first knowledge that I had of the court case in the letter that came to me from Congressman Trent Lott. And they come to me in great numbers.

But I came in to office bringing with me the question that I had about Internal Revenue agents harassing already-desegregated schools just on their own, as if they were somehow not doing right. And so I had spoken to the Secretary of the Treasury long before that notation went on the letter.

Q. ...What you said to the students was that when you made the decision you did not know there were court cases and that was after you had read the memo from Congressman Lott.

A. No, the decision that I’m talking about is, I said to the Secretary of the Treasury that he ought to look into the activities of Treasury agents who were going into desegregated schools and who were then, on their own, just in their own belief in what they thought ought to be done, harassing the schools and saying they ought to be doing better, they ought to be instituting scholarship programs and so forth.

Well, many independent schools, like the one I just addressed last weekend, live in genteel poverty. There’s a limit to how much they can do of that kind. And yet they’re totally desegregated and have no bias whatsoever. And I told him that, and having told him that, that was, I went on about my business. And then some time later, this order was issued and that was the first time when, and the minute that I heard about how it was interpreted, that this was going to change the whole situation with regard to segregated schools and tax exemption.

I said, well, then the answer lies--it should be by law, not by bureaucratic regulation. And I said, let’s send some legislation up taking care of the situation. But now I’m glad you asked me because, just like the children, I’ve told you the truth.

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A version of this article appeared in the May 26, 1982 edition of Education Week as President’s Remarks on Tax-Exempt Status

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