<p>if there were a tax on any endowment over a billion, I think we’d just see schools dividing themselves up (so Harvard Med would seperate from Harvard College, Law, Business, Divinity, etc.) and each having endowments just under a billion. Alternately, schools could spin off their endowments into private foundations that just happened to give items or scholarships to particular colleges. I believe this is one way that state colleges in places that have banned race-based affirmative action are getting around those policies–by having private foundations give out diversity scholarships.</p>
<p>None of this this would bring in a lot of tax revenue but would create a lot of red tape and cut down on the ability for universities to do interdisciplinary work.</p>