The American Spectator

The authors of the story, Jonathan Weisman and Jeffrey Birnbaum, seemed puzzled. The Democratic Party “is supposed to be on the offensive,” they hinted, rather too broadly. Nancy Pelosi’s staff was “flummoxed.” Democrats were “taking cover.” The “difficulty and the political reluctance to tackle issues of ‘tax fairness’” was “striking.”

There was (still is) an opportunity for the Democrats to raise tax rates here, because the Alternative Minimum Tax, intended for millionaires, is now reaching into the pockets of millions and needs to be adjusted. George Bush wants the AMT to be “patched” for another year. Rangel’s bill abolished it completely, and “paid for it” with a new tax-the-rich scheme. If the measure were to pass both houses, and Bush were to veto it, Democrats would be able to crow that the President had capitulated at last and raised taxes on the middle class. So why wasn’t the Senate on board?

An important reason is that those who work on Wall Street are among the more important constituents of Sen. Chuck Schumer and that other senator from New York whose name escapes me right now.

Some senators, even Democratic ones, do grasp the underlying hazard. It can be explained in one word: London. That city is already threatening to become the financial capital of the world, because its tax and regulatory rules are more lenient than they are in New York. And all Wall Street needs is one more hit to push it over the edge.

There’s evidence that Chuck and Hillary do understand that, unlike some journalists who should know better. One difference between the U.S. and Britain (not to mention China — Shanghai should also be put into this equation), is that Britain has already been thoroughly exposed to the socialist bacillus and perhaps has a degree of immunity against it. Maybe we haven’t, yet. But I like to think that the ever-growing investor class will help to fight it off.