Under pressure from rivals, Romney, whose wealth is estimated at between $190 million and $250 million by his campaign, this month disclosed tax returns showing he paid a 13.9 percent tax rate in 2010 on income of $21.6 million.
Representative Sander Levin of Michigan, the top Democrat on the House Ways and Means Committee, said on Jan. 18 that he plans to reintroduce legislation that would tax carried interest at ordinary income rates.
Schwarzman, who said four months ago that he pays an effective personal income tax rate of 53 percent, has been less forthcoming. Blackstone, the world's biggest private-equity firm, is reducing its voting rights in BankUnited Inc. by converting some shares so that Schwarzman doesn't have to disclose his financial information to the U.S. Federal Reserve, a person familiar with the plans said earlier this month.
Peter Rose, a spokesman for Blackstone, declined to comment.
To mitigate the damage to private equity's image, the industry's lobbying group is starting a campaign to showcase its members' contributions to the American economy, using testimonials of people who say private equity has helped their businesses grow. David Rubenstein, Carlyle's co-founder, said Romney shouldn't be criticized for the taxes he pays lawfully.
Still, said Atwood at the Illinois pension, the industry has little choice but to wait for an end of the attacks.
"We all know that private-equity managers make a lot of money and we know how they do their business, but when it's on the front page it causes us to think twice when making investment decisions," Atwood said. "Private equity is more lucrative when it's kept quiet."