Wednesday, August 1, 2007
My contribution to the discussion seems to have been lost in the shuffle (The Taxation of Carried Interests, 116 Tax Notes 183 (July 16, 2007)). And the consensus to which Victor refers seems to me to exclude almost all of the practicing bar as well as partnership tax specialists in the academy who maintain any kind of strong relationship with practitioners. That suggests to me that the practical difficulties that would be created by a change to the taxation of carried interests are significantly understated by most academics.
Not so long ago significant tax reform was lead by a joint effort of lawyers and law professors (consider, for example, the repeal of General Utilities). Now, law professors and practicing lawyers rarely speak to one another. I think it is the professors more than the lawyers who have changed and in many ways not for the better: many academics now found distasteful (almost degrading, in fact) any connection between scholarship and the actual practice of law. As a result, these academics really don’t know much about what lawyers do. In my mind, the best lawyers are as intellectual and as curious as the best academics. We ought not try to distance ourselves from such a talented group of people.