FIRST ROUND(5)

“Any common sense person would say that a highly-paid private equity executive paying less tax than a cleaning lady or other low paid workers […] can't be right.”

Nicholas Ferguson, chairman of SVG Capital, June 4, Financial Times.

“This year, some private equity and hedge fund management firms are attempting to qualify for partnership tax treatment. They seek to do so even though they derive virtually all of their income from providing asset management and financial advisory services.” Senator Max Baucus, chairman of the US Senate Finance Committee, in introductory remarks to the proposed “Blackstone Bill”, June 13.

“To think of carry as the same as the other elements of remuneration is patently absurd.”

Guy Hands, Terra Firma, Financial Times, June 17.

“Of course people have concerns about [income inequality and UK tax law], which is why we have said we would look into it in a sensible and serious way and reflect on what we can do.” Tony Blair, British prime minister, pledging a government review of private equity taxation, June 20.

“Mr. Schwarzman says he had no idea how much the crabs cost.” From aWall Street Journal profile of Blackstone co-founder Stephen Schwarzman. The article reported that Schwarzman's private chef routinely prepared $40-per-claw stone crabs for his boss.

“What they're doing is getting paid for running other people's money. I think at core there's a very good argument to be made for treating this as ordinary income.” Rob Rubin, former US Treasury secretary, June 11.

“We remain hopeful that lawmakers will continue to demonstrate an understanding that the existing venture capital tax structure is appropriate and critical to economic growth in the United States.” NVCA statement, June 14.

“The failure of a large leveraged loan that left intermediaries with unexpectedly large commitments could prompt a widespread disruption.” Bank of England Quarterly Review, June 18.

“The private part of private equity is, as they say in Washington, no longer operative.” Doug Lowenstein, president of the newly formed Washington DC lobbying group, the Private Equity Council, speaking at the Private Equity Investor Relations and Communications Forum in New York, June 21.

“Investment fund employees should not pay a lower rate of tax on their compensation for services than other Americans.” Sander Levin, member of the US House of Representatives, proposing wide-ranging changes to US tax law, June 22.

“There will be a significant event which won't cause a massive macro readjustment, but with enormous amounts of attention directed towards the industry cries will go up of ‘I told you so’ and some knee-jerk decisions will be made.” Brooks Newmark, Conservative member of the UK Treasury Select Committee and a former partner of Apollo Management, speaking to PEO, June 22.

“We need to look again at whether the incentives need to be as great for the larger funds as they are today… Maybe the 10 percent rate needs to be raised to something more reasonable.” Sir Ronald Cohen, founder of Apax Partners, Financial Times, June 13.

“This thing has legs.” A veteran Washington DC tax lobbyist, assessing the momentum on Capitol Hill toward passing some version of the socalled Blackstone Bill, as reported by sister news service PEO, June 21.

“We believe it is imperative that Ways and Means … conduct a hearing on the important issues surrounding private equity, carried interest and publicly traded partnerships.” Charles Rangel, chairman of the US House Ways and Means Committee, which writes tax-policy legislation, June 21.

“Hard cases make bad law.” Lloyd Blankfein, CEO of Goldman Sachs, warning US politicians of excessive focus on high-profile private equity executives when changing the US tax system. FT.com, June 22.

“Will there be a bubble? I don't even know what that means.” Henry Kravis, speaking at a gathering of Canada's Private Equity & Venture Capital Association, May 29.