The New York Times has carried three stories of interest in the last week on ... carried interest. See here, here, and especially here. The issue of the tax rate applied to fee compensation for hedge fund managers has, hitherto, attracted little attention outside a small circle in the financial sector and tax policy makers, but that may be changing. Finance Committee chair and ranking member Sen. Max Baucus (D-MT) and Charles Grassley (R-IA) introduced a bill last week that seeks to reform corporate taxation practices. As the Times explains: The extraordinary pay packages of those who manage hedge funds and private equity have caught the attention of the Senate Finance Committee, which is looking at whether the manager's portion of a fund's profits — called carried interest — should be taxed at the capital gains rate or the higher ordinary income rate. ... Most private equity funds and hedge funds receive two kinds of fees: a 2 percent management fee (2 percent of the assets they manage), and a 20 percent incentive fee, or a 20 percent cut of the profits. Coincidentally or not, four days earlier former Treasury Secretary Mr. Rubin now the chairman of the executive committee at Citigroup, made the case for why private equity and hedge fund managers should pay more than double the low rate in taxes they now enjoy [while] responding to a question posed to him about whether the 20 percent fee on profits that most private equity firms charge should continue to be taxed at the lower capital gains rate of 15 percent or changed to the top ordinary income tax rate of 35 percent. Mr. Rubin, who said he was expressing his own views and not that of his employer, was a panelist at a tax reform conference run by the Hamilton Project.