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Polite Conversation: Weighing in on private equity's tax dilemma.
If you run a partnership and you have capital gains, you have a 15% tax rate; and if you run a corporation and have capital gains, you have a 35% tax rate. When both entities are operating in a similar manner with many thousands of shareholders, freely tradable shares, people managing them who are attempting to evaluate investments, it seems a bit illogical to have that sort of a spread in the tax rate just depending on form."
- Warren Buffett, Berkshire Hathaway, as quoted on CNBC.
I think it's a foregone conclusion that some form of taxation of carried interest as ordinary income is going to happen. There seems to be too much momentum based on what I'm …
