“It may not mean a direct hit to the bottom line for the firms, but investors will see their tax bills increase.”
That's because private equity underwriters (PEU's) are virtual nonprofits, like your local church or safety net hospital. Carlyle declared $2.3 billion in income before provision for income taxes, with a paltry $27.8 million income tax provision. That's a 1.2% income tax rate.
Whether it's income or equity cash-ins, PEU founders get huge tax discounts. Given how much Red and Blue love PEU, I expect little change in PEU firm's nonprofit status.