So, as I mentioned in my story in the American today
, Rep. Charlie Rangel has been holding hearings on overhauling the US tax system today. In the crosshairs is the private equity industry, on which Rangel wants to raise taxes (like a lot of people these days, Rangel doesn't understand that asset-based moneys properly correspond to capital gains tax, whereas things like salary properly correspond to earned income tax).
I've just received a clip of Rep. Phil English taking Democrats (led on this issue by Rangel) to task. Check it out.
Phil English is absolutely right that the AMT is the Democrats' problem, and always has been. Only now are Democrats getting to grips with the idea that the AMT is hitting too many voters who they need, in order to stay in office. And with their pay-go rules, if they want to cut the AMT, they have to raise taxes somewhere to pay for it.
And, with all the venom being spewed about the left-wing blogosphere and liberal TV about overpaid executives and modern-day robber barons, private equity is the obvious target (the actual effect of the tax hike under contemplation of course will not be reined in investment gurus, increased revenue, or redistribution, of course, but just damage to the economy and decreased investment activity-- which is kind of ironic, if you consider that it's been private equity doing things like bailing out Chrysler on which so many union, i.e., 80% Democratic, jobs depend).
On a separate note, it appears that pension funds who previously opposed tax hikes on private equity because, er, they would cut into the pension funds returns, which are passed on to retirees, has reversed its stance because of heavy pressure from unions