"Top House Democrats today introduced wide-ranging legislation that would more than double the tax rate that private equity firms, venture capital funds and many hedge funds pay on their gains."

Increase taxes on an engine of economic growth. Shrewd.

In reality this affects a very small class of people, the few thousand that benefit from carried interest compensation models. However, this small class of people is also able to legally avoid paying taxes because of the mobility of the partnerships that Democrats want to tax more heavily.

In other words, Congress’ attempt to increase taxes through increasing tax rates, which btw is disproven by history time and time again, will result in a decrease of tax receipts. Venture partnerships will move offshore and the use of legal tax shelters will increase. Imposing the corporate tax rate, already onerous, on private equity firms that go public will do again what SOX has done to the public markets, provide one more disincentive to going public.

Burnham is right, Congress is looking for an easy target to shake down, in this case a target that has little public sympathy and not enough mass to affect Democrats in any election.