Kyrsten Sinema delivers a 'gift to private equity' in Democrats' big agenda bill
Democrats' sweeping climate and health care bill forced Sen. Kyrsten Sinema take ownership of a controversial tax break that benefits private equity.
WASHINGTON — As Senate Democrats stood on the brink of passing a sweeping climate and health care bill, Sen. Joe Manchin, D-W.Va., forced Sen. Kyrsten Sinema to do something she had managed to avoid for more than a year: take ownership of protecting a controversial tax break that benefits wealthy investment managers.
The Inflation Reduction Act, released July 27 after an unexpected deal between Manchin and Senate Majority Leader Chuck Schumer, D-N.Y., blindsided Sinema, D-Ariz. It included a policy she had quietly objected to — limiting what critics call the “carried interest loophole,” which lets private equity managers pay a much lower tax rate on their earnings than most people do on ordinary income.
Lobbyists sprang into action. Sinema stayed silent for about a week, making some Democrats nervous that she might torpedo the entire bill. Behind the scenes, she was fighting to protect the $13 billion tax break. And she succeeded, with Schumer ultimately releasing a revised version of the package to win her critical vote.
"We have agreed to remove the carried interest tax provision," Sinema said in her Aug. 4 statement announcing her support.
Sen. Sinema opposes provision closing tax loophole in reconciliation billAug. 4, 202202:05Sinema also secured a change to the 15% corporate minimum tax under the Manchin-backed legislation that would exempt entities owned by private equity funds, which estimates project would save the industry $35 billion.
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