Within a one-mile radius in Cambridge, Massachusetts, sit Harvard University and the Massachusetts Institute of Technology — academic institutions that together boast $74 billion in endowment funds. Based on the size of these “rainy-day funds” alone, the two universities, with a combined student body of thirty-seven thousand, have enough wealth to rival Ghana, with a population of thirty-five million.

The kicker? These private universities are educational institutions, meaning that for most of their history, they have been exempt from federal and state income taxes.

Massachusetts lawmakers want to change that. State legislators are considering a groundbreaking bill that would impose a 2.5 percent annual excise tax on private college and university endowments that are larger than $1 billion. The resulting $2.5 billion raised each year would be more than enough to cover the tuition of every undergraduate student currently attending public colleges and universities in the state.