Time To Put The Carried Interest Debate To Bed
Carried interest taxation is back on the blogs this week, thanks largely to a piece by The New Yorker's James Surowiecki. It also doesn't hurt that Rep. Sandy Levin (D-MI) -- author of a 2007 bill that proposed changing the treatment of carried interest from capital gains to ordinary income -- was named acting head of the House Ways & Means Committee, in the aftermath of l'affaire Rangel. But, just between us, I'm absolutely sick of discussing carried interest (let alone writing about it). That Levin legislation was submitted nearly three years ago, and the issue has been used as political brickbat ever since. The original impediment was a threatened presidential veto, plus some poison pill dispensing by Chuck Shumer. Then came a new sheriff who promised to change the law, until being saddled with the most hapless Congress in recent memory (those folks couldn't pass the salt). For the repeated record: I favor a change to carried interest tax treatment. So do a lot of VC and PE pros, although very few are willing to discuss it on the record.
