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Progressive groups across the country are at odds with a decision made by Sen. Kyrsten Sinema, D-Ariz., to remove the carried interest tax loophole from a social spending and tax bill that is expected to pass through the Senate, claiming she is providing a “tax break” for the wealthy.
The Arizona Democrat announced Thursday that she would “move forward” in supporting the Inflation Reduction Act, the reconciliation package Senate Democrats unveiled last week. As part of the agreement, she successfully removed the carried interest tax provision, which was largely used by wealthy Americans.
In a series of statements provided to Fox News Digital, progressive groups took aim with Sinema’s decision, arguing that the loophole has historically benefited rich Americans and should be eliminated.
Cynthia Carrizales, the press secretary for the Progressive Change Campaign Committee, insisted Sinema’s move to have the carried loophole removed “only benefits wealthy Wall Street financiers.”
SINEMA AMONG TOP PRIVATE EQUITY CASH RECIPIENTS AS SHE REMOVED BILLIONAIRE TAX LOOPHOLE FROM MANCHIN BILL
Sen. Kyrsten Sinema, a Democrat from Arizona, is facing backlash from progressives over her move de ella to eliminate the carried interest tax loophole used by wealthy Americans from the Inflation Reduction Act.
(Al Drago/Bloomberg via Getty Images)
Cynthia Carrizales, the press secretary for the Progressive Change Campaign Committee, insisted Sinema’s move to have the carried loophole removed “only benefits wealthy Wall Street financiers.”
“Senator Sinema’s move to protect a loophole that only benefits wealthy Wall Street financiers sounds more like a job application for after she loses her next primary than an attempt to help everyday Arizonans or Americans,” said Carrizales. “Fortunately, despite Sinema, Democrats are on track to pass a law for the first time in decades that finally forces tax-avoiding corporations to pay taxes — which lowers the share of the burden on working families.”
Frank Clemente, executive director for Americans for Tax Fairness, said Sinema’s decision is an “affront” to Americans who pay their taxes.
“Senator Sinema’s insistence on maintaining the carried interest tax loophole is an affront to everyone who pays their fair share of taxes,” said Clemente. “Her support from her for a tax break that exclusively benefits ultra-wealthy money managers shocks the conscience.”
Similarly, Americans for Financial Reform, a progressive non-profit organization, favors total elimination of the loophole because it mostly benefits people who are “already rich.”
Sinema arrives for a vote at the US Capitol August 4, 2022 in Washington, DC.
(Drew Angerer/Getty Images)
“AFR has long sought the complete elimination of this loophole, which mainly benefits people who are already extremely rich,” said Carter Dougherty, communications director for Americans for Financial Reform. “The draft legislation envisioned only extremely modest changes to this tax provision.”
MANCHIN-SCHUMER SPENDING BILL TARGETS TAX LOOPHOLE FAVORED BY INVESTORS
Sinema’s office, however, argued that the senator is doing “what’s best for Arizona” and concluded that disincentives to investments in businesses could be fatal to the economy.
“Kyrsten has been clear and consistent for over a year that she will only support tax reforms 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, disincentivizing investments in Arizona businesses would hurt Arizona’s economy and ability to create jobs. Senator Sinema makes every decision based on one criteria: what’s best for Arizona.”
Sinema was widely considered the final senator needed for Democrats to pass the plan on climate, energy, health care and taxes, which, if it becomes law, will cap over a year of intra-party negotiations. With her support from her, Majority Leader Chuck Schumer, DN.Y., said he expected all 50 Democrats to vote for the measure.
Senate Majority Leader Chuck Schumer, DN.Y., speaks with reporters following a closed-door caucus lunch, at the Capitol 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, to be introduced on Saturday, will reflect this work and put us one step closer to enacting this historic legislation into law.”
The move by Sinema is a win for the private equity sector, which pours large amounts of cash into her campaign’s coffers.
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As previously reported, individuals and political action committees from the private equity and investment sector have provided her campaign with $282,650 in donations this election cycle, making Sinema the Senate’s sixth-highest 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 a capital gain — a 23.8% levy — rather than regular income, which is taxed at 37.9%.
Fox News’ Joe Schoffstall, Tyler Olson, and Megan Henney contributed to this article.