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BOB MOON: Another day, another private equity story. . . . As we've been reporting a lot lately, these are high times for the big buyout firms. Blackstone went public last month, cashing in for about $4 billion. Of course, the company's never been short on cash. That was part of the reason for the outcry on Capitol Hill when it engineered a deal for itself that would allow it to pay less than half the tax rate paid by most other public companies. Well, today The New York Times reported Blackstone has done one better. Marketplace's Steve Henn explains.

Steve Henn: Normally, if you buy a big company, one of the things you are buying is its tax deductions. But when Blackstone sold its shares to the public there was a little side deal in the prospectus.

Lee Sheppard: OK, here's what happened.

Lee Sheppard is a tax attorney and contributing editor at Tax Notes.

Sheppard: There is a tax-receivable agreement that says, "Well, to the extent that you investors save taxes, you pay 85 percent of that back to the founders in cash every year.

Now to be fair, Blackstone's founders did pay more than a half billion dollars in capitol gains taxes when they sold off a piece of their company. But Sheppard believes over time this little arrangement will help them recoup all that money and hundreds of millions more.

Even before today's news outrage over Blackstone's tax advantages had led to a host of proposals on Capitol Hill to raise tax rates paid by private equity firms. But . . .

William Gentry: Fixing these sorts of problems can be very troubling.

William Gentry is a corporate tax expert and professor at Williams College. He says when it comes to closing corporate tax loopholes, Congress can't get it right.

Gentry: It bedevils Congress that they set up a solution to one problem and then firms and tax lawyers figure out that that solution is actually the door to finding new tax problems for Congress.

Gentry says the real solution is simplicity itself. He says a clean, simplified tax code would give clever tax attorneys and big companies like Blackstone a lot less to work with.

In Washington, I'm Steven Henn for Marketplace.