Michael Knoll of the University of Pennsylvania has published a study claiming that raising the capital gains tax rate for carried interest from 15% to nearly 40% would not result in a large revenue gain for the government. What's interesting is that he does so not on dynamic scoring grounds (the fact that capital gains tax increases alter behavior and always result in less revenue, not more); rather, he points out a rather obvious fact:
40% of private equity money comes from individuals and corporations. If they were to pay higher fees in order to keep these higher-taxed general partners retained as the investor, these fees would deductible as an ordinary and necessary business expense. Thus, much of the higher taxes on the general partner would be lost by the lower taxes of the limited partner. This itself assumes that all parties react statically to this massive tax change, itself a dubious proposition.
At most, Knoll projects a revenue gain of $3.2 billion per year--about 7% of the cost of the AMT patch, which is what Democrats now say they want to use this tax increase for.