Carried Interest Lobby in Disarray In a surprising development, the National Venture Capital Association (NVCA) yesterday broke ranks with other industries that use the carried interest tax break, distinguishing themselves from buyout firms and hedge funds on the grounds that venture capital creates viable businesses -- and so deserves continuing special tax treatment -- while their private equity (PE) counterparts do not. "We're raising our voice. We don't want to get swept up with private equity firms, NVCA vice President Emily Mundell said yesterday at a media roundtable, according to BNA ($) today. Apparently, the PE lobby has lost some key conservative allies in Congress in its efforts to defeat the Levin bill to eliminate the special carried interest capital gains break. One venture capital partner admitted: The private equity industry has spent millions upon millions upon millions on Capitol Hill recently and [Sen. Charles] Grassley (R-Iowa) and others have said they don't like the pressure they're getting. But [VC is] an industry that's been on the Hill for the last 30 years. We have not hired additional lobbyists. The distinction between the econonmic value of VC versus other PE firms is an obscure one and hard to explain. And it has no apparent bearing on VC's case that its, or any fund managers, require or deserve to pay capital gains rates on income received for services performed.