Here is an article on Stephen Schwarzman, one of the two owners of the huge hedge fund, Blackstone Group. The article points out how he has raised his public profile through certain vain and sometimes wrongheaded actions, and in so doing, may have indirectly harmed his fellow hedge fund owners.

"As the Financial Times reported http://www.ft.com/cms/s/9c83e87c-de28-11db-afa7-000b5df10621.html ($ required), the preliminary prospectus said the firm planned to "book profits from private equity at the time an asset is bought"—not when the assets are sold, as most businesses do. More significantly, the offering was structured as a "publicly traded partnership" to take advantage of an absurd wrinkle in the tax code. Under current rules, the asset-management fees that private-equity partnerships like Blackstone reap are taxed not at the 35 percent corporate income-tax rate, but at the 15 percent long-term capital-gains rate, allowing Blackstone to save tens of millions of dollars annually on its tax bill. Finally, in May, at a time when concerns about China's role in the global economy and its influence on the United States were at a fever pitch, Schwarzman agreed http://www.blackstone.com/news/press_releases/05-20-2007.pdf to sell a 10 percent stake in Blackstone to an entity controlled by China's government.
...
Last Thursday, Sens. Max Baucus and Charles Grassley introduced legislation http://online.wsj.com/public/resources/documents/taxes06142007.pdf aimed at publicly traded partnerships like Blackstone. (Andrew Ross Sorkin of the New York Times reports that it has already been dubbed Blackstone's law. http://www.nytimes.com/2007/06/17/business/yourmoney/17deal.html) The law, if passed, would ensure that a publicly held Blackstone Group would essentially pay taxes as an ordinary corporation rather than as a partnership—i.e., its tax rate would soar from 15 percent to 35 percent. What's more, there's a possibility that Congress, in its wisdom, could extend this tax treatment to the hundreds of other massively profitable, privately held partnerships that enjoy similar tax benefits. Since private-equity types calculate net worth in terms of after-tax income, such a change would require the nation's private-equity titans—from Henry Kravis to Stephen Feinberg of Cerberus—to take a significant haircut. Each dollar earned as profit based on fees would be worth only 65 cents instead of 85 cents, which would significantly reduce the net worth of their businesses. (The vast profits of funds make from taking real capital gains wouldn't be affected.)

Here is the link to the rest of the brief but interesting article:

http://www.slate.com/id/2168650/nav/ais/

Mike