Bloomberg News has an editorial on the taxation of "carried interest" for fund managers:
The president's plan would raise $18 billion more over 10 years by eliminating the special treatment of fund managers' income. Typically, general partners in private equity and hedge funds, who may or may not contribute capital to the firm, get most of their earnings as a share of the profits from the assets under management. This so-called carried interest is taxed at the capital-gains rate of 15 percent, rather than at the rate for ordinary income, which can be as high as 35 percent.
Defenders of this perk argue that it is deserved because fund managers contribute "sweat equity" to the partnership. That's a good reason for successful companies to generously compensate partners, but not to warp the tax code. Plenty of other workers sweat to make their corporations more valuable, but they don't get to claim their paycheck as a capital gain.
Great, if the Bloomberg position is that sweat equity should be taxed at 35% rather than at capital gains rates, I look forward to Michael Bloomberg paying 35% tax, or whatever the ordinary income tax rate is, on the growth in the value of his founder's stock in Bloomberg, the company. Until then, it's hard to see his position as anything other than hypocrisy. For more background on the carried interest issue, this Washington Examiner op-ed is a good place to start.