We noted recently that hedge funds (hedge fund news) and private equity (private equity news) funds seemed to be dodging some regulatory reform bullets, as the spotlight was hot on Goldman Sachs (NYSE: GS) and other big dealers for their derivatives practices. But there appears to be one change that some in the industry now see as fait accompli: A tax on so-called carried interest. That's the 20 percent cut of profits that managers often take. Currently, that income is taxed at the 15 percent capital gains tax rate. At least three attempts have been made to tax them as ordinary income, which would mean a 35 percent tax.

But success for proponents of this may now finally be staring at defeat, according to Reuters. Tax revenue is much desired at a time like this, and no one will see hedge funds and private equity funds as sympathetic figures. They will have a hard time playing the victim. We may see a proposal passed as part of a larger reform effort.

For more:
- here's the article

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