The move to squeeze private equity for more tax will probably go nowhere, because key politicians are too cosy with the big buyout firms. But just in case proponents make any headway, Silicon Valley venture capitalists are already distancing themselves from their unpopular East Coast cousins. There's a strong financial incentive: the IRS treats a partner's "carried interest" as a capital gain rather than income, which means less than half the tax rate. Sand Hill Road would rather lose its private equity allies than its tax break. "We're in two different industries," Ted Schlein, a Kleiner Perkins partner, tells Fortune. And the argument? Summarized: Sand Hill Road firms help create jobs; by implication, the Greenwich plutocrats just squeeze American workers.