Private Equity - Maybe not so heavily leveraged in the future?

From the ever eloquent Kevin Drum

If a deal makes no financial sense unless Uncle Sam gives you a big writeoff, then maybe it just doesn't make sense. Lowering the writeoff to 50% would still keep moderately leveraged buyouts profitable, but it would probably kill off the most heavily leveraged ones, which are also generally the most destructive. I think I could live with that.

The context being that there is an entire segment of the P.E. industry (if that is the right term.  'industry'.  hah) that exists solely because of what can best be described as tax quirks (debt and equity not being on an equal footing).