John Edwards announced that he supports new taxes on hedge funds. He endorsed the so-called Blackstone Bill, which Congress is about to consider. The bill would tax hedge-fund managers' "carried interest" as income instead of capital-gains and limit their ability to avoid taxes by shifting income to offshore entities.
This may seem a no-brainer for Edwards given his longstanding committment to economic justice, but some questioned whether he would dare make the move: Edwards had a part-time gig consulting for Fortress, a hedge fund, and has received more money in campaign contributions from Fortress than from any other single entity. Taking a stand that hurts your largest contibutor: there's a word for that.
The bill would bring 4-6 billion dollars into the Treasury and has the support of Warren Buffet and Robert Rubin. But some corporate powers-that-be are warning of the bill's "collateral damage," and some Senators are reluctant to support a bill that would alienate such a cash-rich constituency. Writes John Harwood of the Wall Street Journal:
It's no coincidence that neither Charles Schumer, chairman of the Senate Democrats' campaign committee, nor Hillary Clinton, the presidential front-runner -- and the two senators from New York -- has taken a stand on hedge-fund taxation
Senator Obama has said he might support it. Another presidential candidate Chris Dodd, the chairman of the Banking Committee who has recieved more money from hedge funds than any other candidate, says he will "examine" the potential impact of the bill.
