Carried Interest CFOs

Yesterday I moderated a panel at the Private Equity CFO Conference, which we turned into an audience debate on carried interest taxes. Lots of lively conversation, and an emerging consensus that both sides have some persuasive arguments.

I also wanted to share three demographic notes of interest:

1. About 30% of the attendees believe that carried interest deserves to be treated as ordinary income, which is a much higher percentage than I expected. To be clear, they were asked to pick the side they could best defend, not the one that was to their firm’s benefit.

2. An audience member’s position was uncorrelated to their political affiliation. Plenty of self-described Democrats felt it was capital gains, while plenty of Republicans felt it was ordinary income.

3. Audience members who actually receive carried interest (or who would if their firms made any money), were more likely to subscribe to the capital gains argument.