Will changing the private equity rules increase tax paid?

No matter what legislation is in place, the accountants and lawyers will find a way around it. Rules are rules, but rules are meant to be broken.

The latest argument to this effect comes in a paper by a youth called Michael S Knoll who is at the University of Pennsylvania Law School; University of Pennsylvania - Real Estate Department in a paper entitled “The Taxation of Private Equity Carried Interests: Estimating the Revenue Effects of Taxing Profit Interests as Ordinary Income”. There’s quite a good summary of it (because it’s about as dry as its title) on this tax avoidance site (which presence there gives you some idea of the flavour of what’s to follow).

http://www.taxresearch.org.uk/.../

All rules are meant to be broken. The trick is knowing when……and how INFREQUENTLY this rule may be applied.

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