Law Commons^™

Carried Interest Reform For Hedge Fund Managers, John Ye

John Ye

Private investment managers’ compensation has been a hot topic since the 2012 presidential campaign. Candidate Romney’s tax returns were highly publicized by the media. Romney’s effective tax rate for his recent 2011 tax year was a paltry 14%.[1] Compared to the notional tax rates on ordinary income from 10% to 40%, this would seem too low for a well-off member of our society who made over $13 million in 2011.

Romney’s response was simply that it was not unfair because most of his income was derived from his investments. To discuss fully about the rationale behind why our tax …