Kravis Argues Against Interest ... Carried Interest The lead business article in today's New York Times, Henry R. Kravis, the billionaire founder of the corporate buyout movement, put the lie to Wall Street's claims that taxing fund managers' fee income as ordinary income will shrink returns for America's pensioners. Rep. Sander Levin (D-MI) -- author of a bill to end the so-called "carried interest" tax loophole -- and his staff met in late June. The Times reports that at the meeting, a Levin aide asked Mr. Kravis to explain whether the measure would hurt workers and middle-income families by lowering the returns for pension funds that invest in Kohlberg Kravis funds, two aides at the meeting recalled. They said Mr. Kravis agreed with an answer by a partner that the proposal would not hurt returns, and the meeting ended soon afterward. There is an exception to the age-old common law hearsay rule which permits testimony uttered "against interest," meaning that however dubious the rest of the testimony, something said that undercuts the speaker's interest can be admitted. Sounds like Mr. Kravis has practically debunked the canard by supporters of the loophole that the real losers if it's closed are our now-retired, fondly-remembered, third-grade teachers.