WASHINGTON — In early June, as the Senate Finance Committee began examining how a new breed of Wall Street titan could be paying a special low tax rate on their vast annual salaries, one of the richest of them, hedge fund manager Steven Cohen of SAC Capital Advisors, cut the Democratic Senatorial Campaign Committee a check for $28,500.

Just days later, with the chairman of the DSCC, Senator Schumer, equivocating on legislation to raise taxes on publicly traded equity firms, hedge fund giant James Simons, who earned $1.7 billion last year at his Renaissance Technologies LLC, matched Mr. Cohen’s ante, donating another $28,500 to the DSCC on June 29. By late July, Mr. Schumer was off the fence — and on the side of the hedge funds and private equity firms in opposing the Democratic legislation.

Later this week, Democrats will face more scrutiny over that kind of choice when the House votes on a bill to stave off the growth of the alternative minimum tax for a year, offer new tax breaks to middle class home owners, and expand tax rebates for low-income parents — largely paid for by nearly $50 billion in tax hikes on the burgeoning hedge fund and private equity industries.

The measure has divided Democrats deeply, pitting a rank-and-file that has railed against tax code inequities for years against the party’s money men, who are reluctant to bite the hand that has generously fed them. Hanging in the balance is the AMT, a tax enacted in 1969 to ensure that the wealthiest Americans pay at least some taxes, but which has increasingly affected middle-class taxpayers. “If you’re a Democrat and you have to choose between the alternative minimum tax and the hedge fund industry, that’s one tough ideological choice,” a former employee at the Treasury Department’s Office of Tax Policy and a tax partner at the law firm Crowell & Moring, Viva Hammer, said. “It’s a choice between your votes and your wallet.”

The legislation would plug two obscure but highly controversial tax loopholes, deftly exploited by an industry that leans heavily Democratic. Private equity fund managers earn much of their compensation by taking a cut of their clients’ earnings. It is pay for work, but critics of the arrangement complain that it is taxed as capital gains, at 15% instead of the 35% income tax rate that they would pay otherwise.