I agree with you on the tax treatment for carried interest, and nobody is going to cry if the partners at Blackstone or KKR lose their favorable tax treatment...I guess their argument would be that carried interest revenues are “value at risk” in the transaction, and that there are no guarantees that they are actually going to receive those fees, as they are tied directly to equity growth. With that being said, I think the carried interest structure is the fairest, most beneficial scheme for their investors...pure pay for performance...everybody’s interests are aligned...but those gains should be taxed as ordinary income.

But I do think you paint “private equity” with too broad a brush. Within the asset class, there are obviously a multitude of stragies (growth, buy and build, late stage consolidation, turnaround etc) and each has societal costs and benefits. Since you mentioned Romney/Bain...if you look at Bain’s earliest investments - companies like Staples, Dominos, Ampad, Totes/Isotoner...those absolutely were buy and build investments with significant entrepreneurial risk. Bain’s model obviously has shifted over time to more late stage financial engineering as early stage opportunities became harder to find (and honestly as the lev fin market matured and became more liquid/efficient)

There have obviously been plenty of bad behavior in the PE sector, but net/net, I think it has been a good thing for our economy. Just look at the role that PE played in helping develop the cable, wireless, energy, equipment rental, staffing, chemical and rescuing what’s left of our domestic steel industry.