Under the headline, "Beware Rich People Who Say They Want To Change The World," The Sunday Review section of the New York Times carries an attack on the businessman and philanthropist David Rubenstein. The article describes him as "one of the reasons the government is strapped" and blames him for what the Times calls "the carried interest loophole." The Times claims, "closing the loophole could give the government $180 billion over 10 years."
Managers of real estate, oil and gas, and other investment partnerships have been taxed on their profits at capital gains rates since long before Rubenstein started the Carlyle Group. Congress, not Rubenstein, writes the tax laws, so blaming him for them seems odd. And "give" is the nicest possible word to use what actually would be a "take" — a forced transfer of money away from private-sector investors and into the hands of politicians.
No matter what one thinks of Rubenstein or the ideal tax rate for investment managers, however, it's misleading of the Times to give its print readers such a skewed view of how much money is at stake in the treatment of carried interest as capital gains. The nonpartisan Congressional Budget Office, which the Times often cites as an authority in estimating the cost of tax cuts, in 2013 put the 10 year effect of such a change at a cumulative $17.4 billion. That's less than 10% of the sum the Times article claims is at issue. In 2012 the Obama administration's Treasury Department proposed to "eliminate the carried interest loophole for hedge fund managers and other similar investment service providers," and said "closing this loophole would raise more than $13 billion over the next 10 years." That's $13 billion total over 10 years — again, way less than the $180 billion the Times article claims is at issue.
The Web version of the Times article links to an article by a law professor who makes the $180 billion claim while advocating for a tax increase. At least that article acknowledges the estimate is an outlier. The print version of the article about Rubenstein makes no such acknowledgment.