Why Isn't "Carried Interest" Regular Income?

Reader comment on: Robert L. Johnson on 'Carried Interest' Taxes

Submitted by David Stern (Australia), Jun 7, 2010 03:12

Carried interest is essentially an investment management fee. Why shouldn't that be taxed at the same rate as fees earned by doctors or lawyers or whoever? This won't affect the willingness of investors (including the fund managers) to invest in private equity funds. They'll still be able to pay a lower rate of tax on their capital gains. I really can't see how this will affect the availability of capital for businesses except where fund managers would be planning to reinvest their fees in the fund.

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