Carried interest isn't closing a loophole, it is a "revenue opportunity"

An excellent commentary from PERE (reg. req'd) on the whole carried interest situation can be read here.  Like politicians do they call it the “The American Jobs and Closing Tax Loopholes Act of 2010.”  What a riot.  

Now, I understand that experts are saying that this law will not impact a recovery (if indeed there actually is one going on).  After all partnerships are just one way of doing the deal (albeit the most common one) and there may be other tax efficient ways of doing so, but there is no denying that (a) returns will be lower, meaning (b) some people will not deploy as much money into dirt because the IRRs do not work, especially on the opportunistic side, and (c) some deals that "work" now will not work with higher taxes.  So, how this means more employment is a mystery to me.


And the "loophole closing" is sort of a laugher too. As PERE points out:

The introduction of a hybrid rate is an admission by lawmakers that current carry tax is in fact not a loophole but merely a revenue opportunity they never seriously considered until now. In fact, a code whereby GPs who hold investments for seven years or more enjoy favourable treatment on their carry shows Congressional faith in incentives for long-term investment.

 So there.  Here a tax, there a tax, everywhere a tax tax.  And have a good weekend!