The Real Estate Roundtable has sent a letter to members of the House which amply demonstrates why the lobbying campaign to defend the carried interest taxloophole for fund managers is faring so poorly. According to the Joint Committee on Taxation, the revenue raised by closing this loophole for all fund managers combined -- of which real estate fund managers are but a fraction -- is roughly $2.6 billion annually. That's about a fifth of one one-thousandth of our economy. Bear in mind as you read this that the carried interest loophole relates to whether fund managers' bonuses (and only theirs among all other professions) should be taxed as ordinary income or capital gains. That's all. It's not a tax on investors. It's not a tax on transactions. It has nothing to do with investment performance, capital formation, economic growth, or jobs. Fasten your seat belts, here we go: The carried interest tax is the most significant and potentially most disruptive tax on real estate since the 1986 Tax Reform Act. Tax increases on real estate in 1986 led to massive real estate loan defaults and foreclosures. It ultimately was a significant contributor to the savings and loan debacle costing taxpayers billions in bailout funds. Today, the housing and financial markets are reeling from the subprime crisis and the impact is reverberating throughout the economy. Imposing this damaging tax increase on top of this turmoil is ill-conceived. We are concerned that the legislation does not take into consideration the severe impact it represents to real estate and our economy. OK, now the facts:

• less than 10 percent of all of the income earned in real estate construction and real estate development is earned by partnerships that could be affected by the carried interest provision
• less than 5 percent of all wages earned by employees in the real estate construction and real estate development industry are earned by employees of partnerships that could be affected by the carried interest provision