The House passed a bill increasing taxes on private equity, hedge fund and venture capitalists to prevent the alternative minimum tax from hitting millions of middle-class taxpayers this year.The vote, along party lines, was 216-193.The vote is a victory for Democrats, who faced stiff opposition from Republicans and the business community over the tax increase. And private equity firms spent millions of dollars opposing the tax hike.
Congress established the AMT in 1969 to tax 155 rich taxpayers who were evading taxes. If left unpatched, it would hit as many as 23 million Americans this year.

Most members of Congress dislike the AMT, but they disagree over whether to impose new taxes to pay for the $77 billion bill.

The Politico

Obviously, anyone with common sense knows that the best thing to do here is cut the spending by $77 billion, but since that requires said common sense, it won’t happen in Washington.

This is not likely to pass the Senate anyhow and even if it does Bush will veto it. Coming from a strategic point of view though, I am almost wondering if the Republicans should let this pass through. The majority of money on Wall Street has been going to Democrats this election cycle, likely because they believe they will win the White House. If this tax increase were to become enacted that would slam the Wall Street money pretty hard and send a message to them that the Democrats they have been supporting have turned on them, possibly funneling that money back to the GOP, not to mention this would give the Republicans a huge wedge issue to hit the Democrats on next year and point out to Americans the lot of Socialists that they are.

In any case, something has to be done about the AMT because if nothing happens then millions of middle class households are going to get smacked with this next year and it’s going to hurt them in the wallet far more than any hedge fund manager.

Udall is going to jump in.

Heath Haussamen reports today that Rep. Tom Udall has decided to jump in the New Mexico Senate race and has started to call Democratic officials in the state to inform them of his decision. If confirmed, this would be a major coup for both the DSCC that relentlessly pressured Udall to run even after he ruled it out at the beginning of October, and for the netroots that organized a very successful Draft Udall movement. Previous reports had already indicated that Udall was moving to hire staff and putting the pieces of a run together — so this latest report sounds very believable.

Udall appears to be the strongest candidate for the seat, as two polls taken over the past few weeks show him running well ahead of his Republican opponents by double-digits, while Mayor Chavez, the other Democrat in the race, at best ties them. Udall would first have to defeat Chavez in the primary, and Chavez has already threatened to run a nasty campaign against Udall, making the case last week that Udall runs “too far to the left.” Democrats are now expected to pressure Chavez to drop out of the race, and perhaps get in the House seat left vacant by Heather Wilson.

Campaign Diaries

I knew he’d end up running with how far ahead he was in the preliminary polling against both Pearce and Wilson.  If he makes it through the primary he’s going to be a big headache in November.