Max Baucus Bribes the Investment Industry

The Great Sausage Factory, under the management of the Democrats, is contemplating revising the tax treatment of how a huge swath of the investment world gets compensated. The WSJ has the background here. The tax hit that private equity firms, hedge funds and other investment vehicles that earn a "carried interest" would take would be enormous. It is hard to understand why the Democrats would contemplate such a move given that private equity and hedge fund money went solidly for them prior to last November and helped put them over the top. Why they would then turn around and poke this industry in the eye with a stick is a headscratcher. I guess the Dems feel that they might lose this support for the all-important 2008 cycle unless they do a little arm twisting. Thus the kabuki dance that Sausage Factory Division Supervisor Max Baucus is conducting over the issue. This Bloomberg article refrains from saying baldly that the bribe is underway, but the upshot is pretty clear, Baucus's crusade could easily come to naught if the campaign contributions continue to flow healthily into Democrats' coffers.