Blackstone Group founder Pete Peterson is a legend in the private equity industry and an industry supporter in most ways. But he's also a thoughtful student of the economy, and his pet issue is the out of control U.S. deficit. His foundation, in fact, just launched a new website dedicated to educating people about the harms of big budget deficits--which he's happy to discuss.

When a New York Times columnist asked him whether he thought it was fair "that his proceeds from Blackstone's initial public offering--about $1.85 billion--were taxed at the long-term capital gains rate of 15 percent, far less than the 35 percent ordinary income rate," he gave this answer: "I think if you make an investment with cash and you get a return, that should be capital gains. If you're a hedge fund and a private equity fund and you get your carried interest taxed at capital gains, I can't justify that, because it's a payment for services, and it ought to be taxed as income tax."

That's certainly a break with what virtually every other private equity executive thinks. It's almost a Jerry McGuire moment: he said it himself, he advocates higher taxes. One of the most ardent critics of taxing carried interest as ordinary income is Blackstone co-founder Steve Schwarzman, who once likened the administration's plans to hike taxes on carried interest to Germany's invasions of Poland--for which he later apologized.

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