For helpful comments, I thank Alan Auerbach, Alan Blinder, Mitchell Engler, Victor Fleischer, Mark Gergen, Kevin Hassett, James Hines, Mitchell Kane, Alex Raskolnikov, Julie Roin, Frank Sammartino, Daniel Shaviro, Joel Slemrod, Gene Seago, David Weisbach, Larry Zelenak, and participants at the University of Michigan’s Tax Policy Workshop Series and NYU’s Colloquium Series on Tax Policy and Public Finance. Special thanks to Reed Shuldiner and Michael Knoll for many useful discussions. This research was not supported by funding from any outside source. The working paper version of this Article was first circulated and posted on SSRN on June 25, 2007. See Chris William Sanchirico, The Tax Advantage to Paying Private Equity Fund Managers with Profit Shares: What is It? Why is It Bad? (University of Pennsylvania Institute for Law and Economics Research Paper No 07-14, June 25, 2007), online at http://ssrn.com/abstract= 996665 (visited June 8, 2008).