"If you're a Democrat and you have to choose between the alternative minimum tax and the hedge fund industry, that's one tough ideological choice," said Viva Hammer.... "It's a choice between your votes and your wallet."
How sorry a system do we have that we hear this all the time: "they have to choose between the voters and the money"? Worse yet, we don't always hear it, we just see it when lawmakers cast votes on legislation.
This time, as the WaPo reports, it's about Democrats deciding whether to make superwealthy hedge fund managers pay the same tax rates as everyone else. Seem obvious? Yes. But when they factor in the money they rake in from the hedge funds? Not so much.
The measure has deeply divided Democrats, pitting a rank and file that has railed for years against inequities in the tax code against the party's money men, who are reluctant to bite the hand that has generously fed them.
...
The legislation would plug two obscure but highly controversial tax loopholes, deftly exploited by an industry that leans heavily Democratic. Private-equity fund managers earn much of their compensation by taking a cut of clients' earnings. It is pay for work, but critics of the arrangement note that it is taxed as capital gains, at 15 percent instead of the 35 percent income tax rate that they would otherwise pay.
It's this sort of appalling favoritism of wealthy campaign contributors in our democracy that cries out for
full public financing reform across the board, including the Fair Elections Now Act in Congress. That's why we're working to
Get It Straight in 2008.
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