Looming Tax Bill to Test Dem Loyalties

Bill to help middle class hurts their hedge-fund backers
By Jonas Oransky,  Newser Staff
Posted Nov 7, 2007 8:04 PM CST
House Financial Services Committee Chairman Rep. Barney Frank, D-Mass., says "hedge funds are to New York what tobacco has been to North Carolina. People don't like to tax their constituents." (AP Photo/Susan...   (Associated Press)
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(Newser) – A bill to give tax breaks to middle- and low-income people by closing loopholes that keep equity executives’ tax rates low is set for a vote this week in Congress, the Washington Post reports, forcing Democrats to choose between standing up for the common man and protecting the hedge-fund managers who keep campaign coffers full.

Senate Majority Leader Harry Reid said last month the hike for execs were effectively tabled for the year; now that it’s back, it’s expected to pass in the House—and spark a Senate showdown. One top hedge-funder who made $900 million last year would have paid $36 million more in taxes at the normal rate; he's a key Democratic contributor.