We've noted recently that there is a movement afoot in Washington that would tax the "carry," or the 20 percent chunk of gains, that has proven so profitable for private equity firms. Senator Charles Grassley has called for the carry to be taxed as ordinary income rather than as long-term capital gains. Ouch! But there are reasons to think the change may never happen. Carry arrangements are common also in real estate partnerships and hedge funds as well. A law that targeted only private equity firms may be tricky to craft. Also, if the law were to apply to other industries, the outcry would increase. You have to think that the well-heeled Private Equity Council, whose members include Blackstone, KKR and Texas Pacific Group, will not just take this.

For more:
- here's a CNNMoney.com article