Critics of current law think it is unfair that these private equity partners are taxed at capital gains rates, whereas other high-income individuals like doctors and lawyers pay the much higher tax rates for ordinary income. It is a reasonable point, and some reform may well be appropriate. But as the tax situations of Abe through Earl illustrate, it is not obvious what the best approach would be. Not all problems have easy answers.So the defense is that the issue is tough? That's the argument? So if it's a fair criticism, should we expect Mankiw's client, Mitt Romney, to be open to reform of the capital gains system by which Romney pays less tax than I do?
I don't think so.