- Kyrsten Sinema said she would support the Cut Inflation Act after reaching an agreement with fellow Democrats.
- This was to maintain a loophole used by private equity executives to pay less tax on their compensation.
- Open Secrets lists three major private equity firms as Sinema’s top campaign donation sources.
Kyrsten Sinema’s decision to support the Cut Inflation Bill has put President Joe Biden’s derailed legislation on drug prices, energy, climate change and taxation back on track.
The Arizona senator’s support was secured Thursday night after his fellow Democrats dropped a proposal to close the so-called “carried interest” loophole, which is commonly used by private equity, fund executives speculative and real estate investment to pay a lower rate of tax on their compensation.
As such, it was a win for many Sinema campaign donors.
According Open Secretsglobal private equity firms KKR, Carlyle and Apollo Global Management are among the top 20 sources of donations to Sinema’s campaign committee between 2017 and 2022.
As Open Secrets notes, it was not the organizations on the list that donated the money directly, but rather their “political action committees, their individual members, employees or owners, and the immediate families of those individuals.” . In addition, subsidiaries and affiliates are included in the organizations’ total donations.
Other organizations listed by Open Secrets among the top 20 donors include Andreessen Horowitz, the Silicon Valley venture capital firm that has invested in companies such as Facebook, Twitter and Airbnb; and Rudin Management, a private commercial and residential landlord and developer in New York.
In total, Sinema received $2.2 million from investment firms between 2017 and 2022, according to Open Secrets.
Sinema’s office did not immediately respond to Insider’s request for comment.
On Wednesday, Sinema told donors at a fundraising campaign that it didn’t make sense to rush private equity firms by raising taxes on carried interest because the industry will fund projects under new infrastructure and semiconductor legislation, a lobbyist who attended the event told the Wall Street Journal.
Simply put, when private equity, hedge fund, or real estate investment executives receive a percentage of profits from an investment gain as compensation, they are taxed at the lower capital gains rate. at the comparable income tax rate.
The drop in interest in the legislative package marks a turnaround for Democrats after Sen. Joe Manchin announced an agreement on the issue with Senate Majority Leader Chuck Schumer last week.
The Deferred Interest Tax provision of the Cut Inflation Act was expected to have increased by approximately $14 billion over 10 years.
Biden Thursday evening praised the cooperation of Sinema as “another critical step toward reducing inflation and the cost of living for American families.”
Democrats are seeking to pass the law using the Senate’s “reconciliation” process to avoid a Republican filibuster.