Mr. Ifshin’s concern is driven by the understanding that investors and fund managers will seek other markets if increased taxes threaten their profit margins in America.

And that’s the primary issue.

The U.S. economy is losing jobs to foreign competitors. The departure of private equity capital will almost certainly guarantee job loss and shake our mercurial economy.

The situation becomes dire when you factor in extremely high corporate tax rates. Our main global competitors all have lower corporate taxes. With substantially lower tax rates and seemingly boundless growth potential, China, India, and many Eastern European countries are posed to dominate the global private equity market.

These nations will be bolstered by the inevitable influx of American investor capital and the valuable expertise of our private equity managers.

The managers will find it more profitable to grow other economies. And if Congress effectively shows them the door, they will leave. Capital always seeks the path of least resistance and greatest opportunity.

A partner at the Washington, D.C., based private equity firm Carlyle Group, Bruce Rosenblum, cautioned Congress to “move with great caution before it changes the incentives that exist today for investors to nurture and grow such businesses.” His comments were echoed by the assistant treasury secretary, Eric Solomon, who reminded Congress that the flexibility offered to such partnerships has a role in the strength and resiliency of the American economy.

Think about it: private equity managers are responsible for growing funds for investors. An enormous tax increase reduces their incentives and the gains returned to investors. Why then would they focus on rescuing and restructuring American companies and creating American jobs when it’s more profitable to do so abroad? These are the questions facing the tax hungry in Congress whose eyes many be bigger than our economy can stomach.