Shrilaxmi S. Satyanarayana (J.D. 2008, St. John's) has published Note, Tax Equality: Eliminating the Low Effective Marginal Tax Rates for Private Equity Professionals, 82 St. John's L. Rev. 1589 (2008).  Here is the abstract:

The ability to translate ordinary wage income into long-term capital gains income can result in a significant reduction in a taxpayer’s overall tax liability due to the significant differential in the marginal tax rates for ordinary income and long-term capital gains income. While reclassifying income in this regard is beyond the control of most taxpayers, certain individuals employed in the private equity and venture capital sectors are able to achieve such a transformation by taking advantage of partnership tax provisions that allow income earned by the partnership to retain the same treatment it receives when earned at the partnership level, when it is taxed at the individual partner’s level. This Note examines the case law and Internal Revenue Service policies that have allowed certain partners in private equity and venture capital funds to re-categorize their income from ordinary income into long-term capital gains. The Note also considers other segments of the Internal Revenue Code that treat stock-based compensation as ordinary income and argues that in the interest of fundamental fairness, the private equity and venture capital professionals’ compensation should likewise be treated as ordinary income.