"It will be much easier to repeal if Mitt Romney becomes president than if Mr. Obama remains president," he said.

Still, Romney adviser Eric Fehrnstrom told reporters last month that the Republican presidential candidate thinks carried interest should be taxed at the same rate as a capital gain. The candidate has proposed eliminating the tax on capital gains for those with adjusted gross incomes of less than $200,000 a year.

'Convoluted' Code

Private-equity executives also rely on fairness arguments to make their case. In a Jan. 27 appearance on Bloomberg Television, Steve Pagliuca, the managing partner of Bain Capital, said the tax code is "convoluted" and "almost unintelligible."

"We've got to have a fair tax code," he said. "We don't wake up every day saying 'Well, what's the tax code?' We wake up trying to build great businesses and we pay all of the taxes that are necessary."

Mark Heesen, president of the National Venture Capital Association, an industry trade group based in Arlington, Virginia, said his industry often reminds lawmakers of its differences from other investors such as private-equity firms. Venture capital firms typically invest in early-stage companies and don't use as much leverage as private-equity investors do.

Creating Something

"We are able to demonstrate our belief that quintessential capital gains are all about creating something out of nothing," he said. "That's what venture capital does."

Heesen said his message to Congress is that it's important to maintain the link between carried interest and capital gains, even if the capital gains tax rate increases. Unless Congress acts, such gains will be taxed at 20 percent in 2013. High earners will face an additional 3.8 percent tax on capital gains and other unearned income as part of the 2010 health-care law.

On the other side of the issue is the AFL-CIO, which has lobbied in favor of changing how carried interest is taxed, and is prepared to do so again. Damon Silvers, the policy director for the labor organization in Washington, called the treatment of carried interest a "tax subsidy for leveraged buyouts."

"We are going to be pressing the carried interest issue at whatever opportunity we get," he said. "Mitt Romney's tax returns are the world's greatest educational tool about the impact of the carried-interest loophole."