September 27, 2022


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Progressive groups across the country are opposing the decision by Sen. Kyrsten Sinema, D-Ariz., to remove the carried interest tax loophole from a social spending and tax bill expected to pass the Senate, arguing that it provides a “tax break” for the rich.

The Arizona Democrat announced Thursday that she would “move forward” with her endorsement Inflation Reduction Act, the reconciliation package that Senate Democrats unveiled last week. As part of the deal, he successfully removed the carryforward tax provision, which was heavily used by wealthy Americans.

In a series of statements provided to Fox News Digital, progressive groups took aim at Sinema’s decision, arguing that the loophole has historically benefited wealthy Americans and should be eliminated.

Cynthia Carrizales, the press secretary for the Campaign’s Committee for Progressive Change, insisted Sinema’s move to remove the loophole that exists “only benefits wealthy Wall Street financiers.”

CINEMA AMONG TOP RECIPIENTS OF PRIVATE EQUITY COUNTS AS MANCHIN BILL REMOVED SHAREHOLDER TAX SHELTER

Sen. Kyrsten Sinema, D-Arizona, is facing backlash from progressives over her move to eliminate the carryforward tax loophole used by wealthy Americans from the Inflation Reduction Act.

Sen. Kyrsten Sinema, D-Arizona, is facing backlash from progressives over her move to eliminate the carryforward tax loophole used by wealthy Americans from the Inflation Reduction Act.
(Al Drago/Bloomberg via Getty Images)

Cynthia Carrizales, the press secretary for the Campaign’s Committee for Progressive Change, insisted Sinema’s move to remove the loophole that exists “only benefits wealthy Wall Street financiers.”

“Senator Sinema’s move to protect a loophole that only benefits wealthy Wall Street financiers looks more like a job application for after she loses her next primary than an effort to help everyday Arizonans or Americans,” Carrizales said. “Thankfully, despite Cinema, Democrats are on track to pass a law for the first time in decades that finally forces tax-dodging corporations to pay taxes — which reduces the share of the burden on working families.”

Frank Clemente, executive director of Americans for Tax Fairness, said Sinema’s decision was an “insult” to taxpaying Americans.

“Senator Sinema’s insistence on maintaining the carried interest tax loophole is an insult to all who pay their fair share of taxes,” Clemente said. “Her support for a tax break that solely benefits ultra-wealthy money managers boggles the mind.”

Similarly, Americans for Financial Reform, a progressive nonprofit, advocates eliminating the gap entirely because it primarily benefits people who are “already rich.”

Sinema arrives for a vote at the US Capitol on August 4, 2022 in Washington, DC.

Sinema arrives for a vote at the US Capitol on August 4, 2022 in Washington, DC.
(Drew Anger/Getty Images)

“AFR has long sought to fully eliminate this loophole, which primarily benefits people who are already extremely wealthy,” said Carter Dougherty, communications director for Americans for Financial Reform. “The draft law provided only extremely modest changes to this tax provision.”

MANCHIN-SCHUMER TARGET SPENDING ACCOUNT INVESTOR-FAVORATED TAX CENTER

Sinema’s office, however, argued that the senator is doing “what’s best for Arizona” and concluded that disincentives for business investment could be fatal to the economy.

“Kyrsten has been clear and consistent for more than a year that she will only support tax reform and revenue options that support Arizona’s economic growth and competitiveness,” her office said in a statement shared with Fox News Digital. “At a time of record inflation, rising interest rates and slowing economic growth, preventing investment in Arizona businesses would hurt the economy and Arizona’s ability to create jobs. Senator Sinema makes every decision based on one criterion: what it’s better for Arizona.”

Sinema was widely seen as the last senator Democrats needed to pass the climate, energy, health care and tax plan, which, if it becomes law, would cap a year of intra-party negotiations. With her support, Majority Leader Chuck Schumer, D-N.Y., said he expects all 50 Democrats to vote in favor of the measure.

Senate Majority Leader Chuck Schumer, DN.Y., speaks to reporters after a closed-door luncheon on Capitol Hill in Washington, Tuesday, July 19, 2022.

Senate Majority Leader Chuck Schumer, DN.Y., speaks to reporters after a closed-door luncheon on Capitol Hill in Washington, Tuesday, July 19, 2022.
(AP Photo/J. Scott Applewhite)

“I am pleased to report that we have reached an agreement on the Inflation Reduction Act that I believe will receive the support of the entire Senate Democratic conference,” Schumer said this week. “The final version of the Reconciliation bill, which will be introduced on Saturday, will reflect that work and bring us one step closer in enacting this historic legislation into law.”

Sinema’s move is a victory for the private equity sector, which has been pouring large sums of cash into her campaign coffers.

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As previously reported, individuals and political action committees from the private equity and investment sector gave her campaign donations of $282,650 this election cycle, making Sinema the sixth-highest Senate recipient from the industry, according to data compiled by the Center for Responsive Politics. .

Under the loophole, a private equity manager’s income can be taxed as capital gains — taxed at 23.8% — instead of ordinary income, which is taxed at 37.9%.

Fox News’ Joe Schoffstall, Tyler Olson and Megan Henney contributed to this article.



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