According to a couple of sources, members of the Senate Finance Committee are considering a proposal to change the tax treatment of a carried interest. (A carried interest is the profits interest in partnership received as compensation by VC and private equity fund managers.) My Two and Twenty paper addresses this very issue, and now offers a handy menu of reform alternatives. While treating carry as ordinary income is appealing - we normally treat returns on human capital as ordinary income - I think there are some strong arguments for other reform alternatives as well.
I'll post more about this when I get an updated version up on SSRN (and finally submitted to law reviews!) next week.
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