03/16/2012 08:41 am ET Updated May 16, 2012

Mankiw On Capital Gains: Why Are They Special?

WHAT is carried interest? And why does it get the tax treatment it does?

These arcane questions are usually reserved for the green-eyeshade crowd. And for good reason: they can be so bewildering that they seem to be taken from an I.Q. test written just for accountants. But because they concern a few very high-income individuals, including the presidential candidate Mitt Romney, for whom I am an adviser, they have been getting broader attention lately. So let's examine the issue.

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