LOOPHOLE SAVED EACH CARLYLE PARTNER $50 MILLION IN TAXES OVER FOUR YEARS

“In 2012, when [the] Carlyle [Group] made its first offering of public stock, it reported that Rubenstein, D’Aniello, and Conway — [Stephen] Norris departed in 1995—had been paid about a hundred and forty million dollars each the previous year, an amount that dwarfed the pay of nearly all top C.E.O.s that year. (Jamie Dimon, of JPMorgan Chase, made twenty-three million dollars.) They had also received significant returns on their own investments in Carlyle funds: [David] Rubenstein collected fifty-seven million dollars, D’Aniello seventy-eight million.

“Of that hundred and forty million in pay, a hundred and thirty-four million came from the firm’s share of its investors’ profits. The filings make it difficult to determine the exact distribution, but industry experts say that at a large firm like Carlyle three-quarters of a partner’s pay typically comes out of carried interest. By that calculation, the loophole would have saved the partners about twenty million dollars each, in 2011 alone. Over the next four years, each partner’s savings would have amounted to more than fifty million dollars.”

Alec MacGillis, “The Billionaires’ Loophole,” New Yorker, March 14, 2016, pp: 64-73.