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Progressive groups target Sinema over decision to remove tax-carried interest loophole from Manchin bill

Written by Javed Iqbal

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Progressive groups across the country are on the brink of one decision made by Senator Kyrsten SinemaD-Ariz., to close the loophole in tax-carrying interest from a social spending and tax bill expected to pass the Senate, claiming she is giving a “tax break” to the wealthy.

The Arizona Democrat announced Thursday that she would “move forward” with endorsements The Inflation Reduction Act, Senate Democrats unveiled the reconciliation package last week. As part of the deal, she successfully eliminated the carrying interest tax provision that was widely 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, press secretary for the Progressive Change Campaign Committee, insisted that Sinema’s move to remove the loophole “only benefits wealthy Wall Street financiers.”

SINEMA AMONG TOP PRIVATE EQUITY CASH RECIPIENTS AS SHE REMOVED BILLIONAIRE TAX EVASION FROM MANCHIN BILL

Late.  Kyrsten Sinema, a Democrat from Arizona, is facing backlash from progressives over her move to eliminate the loophole used by wealthy Americans from the Inflation Reduction Act.

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

Cynthia Carrizales, press secretary for the Progressive Change Campaign Committee, insisted that Sinema’s move to remove the loophole “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 after she loses her next primary than an attempt to help ordinary Arizonans or Americans,” Carrizales said. “Fortunately, despite Sinema, Democrats are on track to pass a law for the first time in decades that finally forces tax-dodging corporations to pay taxes — reducing the share of the burden on working families.”

Frank Clemente, executive director of Americans for Tax Fairness, said Sinema’s decision is an “insult” to Americans who pay their taxes.

“Senator Sinema’s insistence on maintaining the loophole in the carrying interest tax is an affront to everyone who pays their fair share of taxes,” Clemente said. “Her support for a tax break that solely benefits ultra-wealthy money managers shocks the conscience.”

Similarly, Americans for Financial Reform, a progressive non-profit organization, advocates a total elimination of the loophole because it mostly 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 Angerer/Getty Images)

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

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

“For over a year, Kyrsten has been clear and consistent that she will only support tax reforms and revenue opportunities 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, discouraging investment in Arizona businesses would hurt Arizona’s economy and ability to create jobs . Senator Sinema makes every decision based on one criterion: What is best for Arizona.”

Sinema was widely seen as the final senator needed for Democrats to pass the climate, energy, health care and tax plan, which, if passed, would cap a year of intra-party negotiations. With her support, 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 to reporters after a closed-door caucus luncheon at the Capitol in Washington, Tuesday, July 19, 2022.

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

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

Sinema’s move is a win for the private equity sector, which is pouring large amounts of cash into her campaign coffers.

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As previously reported, individuals and political action committees have from private equity and the investment sector has provided her campaign with $282,650 in donations this election cycle, making Sinema the Senate’s sixth-highest industry recipient, 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 – taxed at 23.8% – rather than 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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Javed Iqbal

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