I never thought of it this way, but economist Dean Baker, writing in Business Week, points out that the current tax rule permitting private equity fund managers to pax taxes on performance-based fee income for services at the capital gains rate is tantamount to a special tax rate for one profession. Despite the many areas of dispute among economists, virtually all of them would agree tax rates should not vary by occupation. In other words, we don't want to see one tax rate for firefighters, a different tax rate for schoolteachers, and a third tax rate for bookkeepers... We might want to subsidize some important jobs (albeit probably not with special tax rates) that don't offer very high pay—for example, doctors in rural areas or inner-city schoolteachers. I doubt, however, that anyone would suggest the government initiate a policy of subsidizing hedge fund managers, some of whom pocket $1 billion a year. Baker is in good company. Sen. Charles Grassley (R-IA), ranking Republican on the Senate Finance Committee said at the Committee's "Carried Interest, Part 1" hearing this week: We can't allow the carried interest tail to wag the capital gains dog... the carried interest issue involves tax code integrity... This issue is about closing a loophole, not raising taxes on a single industry... I'd direct Mr. [Steve] Forbes and other critics to cool it on the hysteria and get their facts straight [instead of] talking about charges of a fictitious tax increase."