Kevin Hassett and Alan Viard of the American Enterprise Institute have posted a detailed article arguing against the effort of some Democrats in Congress and of President Obama to raise the tax on "carried interest" of fund managers. The piece focuses on private equity rather than the other partnerships that would be affected. One highlight:
Because this provision targets for special treatment an industry that has been particularly successful, it could have a chilling effect on other businesses. They might conclude that they will be singled out for similar treatment at a future date if they prosper enough to become an attractive target for revenue-hungry legislators. These concerns are exacerbated by the demonization of private equity firms that has been associated with efforts to pass this legislation. From oil companies to health insurance companies to private equity firms, the list of industries targeted for special punitive measures seems to grow each year. The sequence of targeted measures runs the risk of creating an environment that is viewed as generally hostile to business.
Thanks to reader-watchdog-participant-community member-content co-creator E. for sending the link.