The tax news for alternative asset managers gets grimmer and grimmer.  Ryan Donmoyer of Bloomberg News reports that a new issue is being reviewed by Congress:

Congressional aides say the Senate Finance Committee is studying a technique that allows fund managers to qualify most or all of their income for the 15 percent capital-gains rate by structuring their management fee as a share of profits rather than a percentage of assets.

By my reading of this article and Donmoyer's previous reporting, Congress is looking at changing decades-old policy with respect to four different things in order to screw alternative asset managers:

1.  Tax treatment of carry;

2.  Ability to defer offshore payments;

3.  Tax treatment of publicly-traded investment management firms organized as partnerships; and

4.  Tax treatment of profits interests allocated in lieu of payment of management fees.

Here's my deal for Congress:  I'll let you change 3 and 4 in exchange for you leaving 1 and 2 alone.  You have 30 days to accept this deal.