<p>The idea of taxing colleges with large endowments seems analogous to the maximum amount on which one can claim mortgage interest. One can borrow up to $1mm and the interest on that is tax-deductible, but over that it is not. Along the same lines, proposing something like exempting the earnings on the first billion of endowment seems reasonable, but taxing everything above that. I’m not normally a big fan of taxes, but some of these endowments are just obscenely large relative to the rest of the educational world. Is that healthy for the system?</p>