Complaints about the carried interest issue bug me. (It's not an exception -- it's just how partnerships work.)
IMO the problem has nothing to do with carried interest or hedge funds in particular. I think the real issue is our bizarre idea that certain types of income (long-term capital gains) are special and should be taxed less. Hedge funds (and only the kind that generate long-term gains) are just easy things to pick on.
Have you noticed that pretty much every large corporation carefully avoids corporate taxes and arranges for its principals' income to be mostly long-term capital gains or qualified dividends? It's the same failure mode, minus the hedge fund.
So yes, I think Congress should fix the problem, but I don't think that carried interest is the problem.
IMO the problem has nothing to do with carried interest or hedge funds in particular. I think the real issue is our bizarre idea that certain types of income (long-term capital gains) are special and should be taxed less. Hedge funds (and only the kind that generate long-term gains) are just easy things to pick on.
Have you noticed that pretty much every large corporation carefully avoids corporate taxes and arranges for its principals' income to be mostly long-term capital gains or qualified dividends? It's the same failure mode, minus the hedge fund.
So yes, I think Congress should fix the problem, but I don't think that carried interest is the problem.