Treasury Secretary Henry Paulson warned that raising taxes on hedge funds and buyout firms may have ``unintended consequences'' and said Congress shouldn't ``single out'' firms that go public, such as Blackstone Group LP.

``I don't believe it makes sense to single out one industry,'' Paulson said when asked about proposed legislation at a conference hosted by the Wall Street Journal in New York. Senate legislation would force Blackstone to pay taxes at corporate rates of 35 percent instead of as a partnership, with a burden as low as 15 percent. ``We need to be careful dealing with something like this piecemeal,'' Paulson said.

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Paulson said other industries use the partnership model, citing real estate and construction. ``We have tended to single out companies and industries to respond to the pressures of the moment,'' he said. ``We need to think comprehensively. We need to be careful of unintended consequences.''

As I've always said, these proposed tax hikes are discriminatory.  I'm glad Hank agrees.

Photo: Hank Paulson speaks at Percy and Zoe's wedding reception.