Democrats Have Delivered for Wall Street Yet Again
Democrats pretended they were cracking down on private equity moguls. The truth: Dems were actually protecting them — perhaps because private equity firms are major Democratic donors.
Chuck Schumer (D-NY) speaks after the passage of the Inflation Reduction Act, which Democrats had promised would close the notorious carried interest tax loophole. (Drew Angerer / Getty Images)
Democrats and the Washington press corps spent the last week insisting that the party was about to close a notorious tax loophole that allows many Wall Street billionaires to pay a lower tax rate than most Americans.
In truth, the proposal would have left most of the loophole open, fulfilling Senate majority leader Chuck Schumer’s (D-NY) long-standing pledge to protect the private equity industry that bankrolls his campaigns. Now the plan is gone.
On Thursday night, Senator Kyrsten Sinema (D-AZ), a favorite of private equity donors, announced that Democrats “have agreed to remove the carried interest tax provision.” Meanwhile, President Joe Biden — who pledged to close the loophole — continues to decline to try to use his executive tax enforcement authority to shut the tax break.
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