There has been a great deal of discussion recently regarding the tax treatment of carried interest. First, the outgoing Republican chairman of the House Ways & Means Committee, Dave Camp, caught many by surprise by including carried interest in his proposal for comprehensive tax reform. The following week, President Obama, who has long supporte changing the tax treatment of carried interest, proposed a much broader plan to raise rates on carried interest as part of his FY 2015 budget.
As is well known, the federal government has an enormous amount of debt and is running annual deficits. Rising costs and demand for additional spending add more pressure. It is therefore not surprising that elected officials are looking for ways to raise revenue.
However, as is the case with so many other things in Washington, D.C., when it comes to carried interest, objective analysis has given way to half-truths and misinformation.