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Sen. Kyrsten Sinema (D-AZ), the remaining Democrat holdout to her party’s revamped reconciliation package which ‘co-holdout’ Joe Manchin (D-WV) caved on last week, wants to change aspects of the legislation before she’ll sign off on it.
According to Politico, citing ‘multiple people familiar with the matter,’ the Arizona Democrat wants to get rid of language narrowing the so-called carried interest loophole – which allows investment managers to pay lower taxes, as it’s not considered part of their ordinary income. According to the report, cutting that provision would eliminate $14 billion of the bill’s $739 billion in projected income.
Last summer Sinema interned a winery owned by the co-founders of one of the biggest private equity firms in the world.
The tax increases she’s blocking (tightening the carried interest loophole) would directly benefit her private equity friends. https://t.co/yTHQFv9W4p
— FxMacro (@fxmacro) August 3, 2022
Sinema also wants to add roughly $5 billion in drought resiliency funding – a “key ask for Arizona given the state’s problems with water supply,” Politico notes.
Will Dems go for it? There’s no word yet from Democratic leaders but this is a relatively modest ask in the grand scheme of the legislation. Still, Senate Majority Leader Chuck Schumer said narrowing carried interest was included at the behest of Manchin, who said it would make the tax code more fair. -Politico
Wed, 08/03/2022 – 16:00