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kyrsten sinema
Meet the 11 Private Equity Donors Trying to Buy the 2024 Election
The financiers are spending big on candidates that will preserve the carried interest tax deduction, which allows them to pay a lower 23.8% tax rate on the capital gains passed on to them as compensation rather than the top income tax rate of up to 40.8%.
Aug 05, 2024
Eleven of the top 50 individual contributors to political campaigns this election cycle work in the finance industry—specifically in private equity—and are betting big on congressional and presidential candidates who will protect one very special federal tax break worth billions of dollars to them: the carried interest loophole.
So far this election cycle, these 11 private equity billionaires have already contributed more than double the amount that more than 147 private equity firms pumped into federal elections in all of the 2016 election cycle. Private equity—which largely entails rich investors buying and selling companies—is only a part of a larger finance industry that includes hedge funds, securities firms, banks, and investment companies and managers.
This loophole, of course, is not the only tax perk that private equity firms favor. They also push to keep the tax rate on capital gains much lower than the tax rate on ordinary income.
Finance—securities and investments—tops the list of industries giving the most money to date this round, with more than $1 billion in contributions to candidates, parties, and PACs, according to the nonpartisan political funding tracker Open Secrets.
The 11 private equity leaders have contributed more than $223 million to congressional and presidential candidates and the super PACs that support them, accounting for almost 20% of all money contributed by thousands of companies in the finance sector, according to Open Secrets data. During the 2016 election cycle, the Center for Media and Democracy (CMD) reported that the 147 private equity firms it analyzed contributed $92 million to candidates and super PACs.
The carried interest tax deduction allows private equity investment managers to pay a lower 23.8% tax rate on the capital gains passed on to them as compensation rather than the top income tax rate of up to 40.8% they would pay on the same amount if it were considered wage or salary income.
“Carried interest is a form of compensation paid to investment executives like private equity, hedge fund and venture capital managers,” CNBCexplains. “The managers receive a share of the fund’s profits—typically 20% of the total—which is divided among them proportionally. The profit is called carried interest, and is also known as ‘carry’ or ‘profits interest.’”
The $223-million investment these 11 private equity billionaires are making in campaign contributions in hopes of keeping the loophole intact will save the industry an estimated $14 billion in taxes over 10 years, as Senate Democrats pointed out in 2022 when they were forced to let go of legislation to get rid of it.
This loophole, of course, is not the only tax perk that private equity firms favor. They also push to keep the tax rate on capital gains much lower than the tax rate on ordinary income. And some private equity managers have other public policy interests, like billionaire Jeffery Yass, the largest individual donor this election cycle, who gives millions of dollars to school choice groups and other conservative causes.
On April 15, 2024, Sen. Tammy Baldwin (D-Wis.) introduced the Carried Interest Fairness Act (S. 4123), which she co-sponsored with 14 other senators, in order to eliminate the tax loophole, something that Democrats have long sought to fix. The proposed legislation treats the buying and selling of companies as ordinary income if that is a firm’s primary business. “By closing the carried interest loophole, we’ll make our tax code fairer for working families, cut the deficit, and ensure that those at the top of the food chain aren’t exploiting the system to further enrich themselves,” Baldwin said in a press release.
While 90% of the private equity contributions made so far this election cycle have gone to Republicans or the PACs that support them, not every Democrat is opposed to eliminating the loophole.
Before Sen. Kyrsten Sinema (I-Ariz.) left the party to become an independent in 2022, she “courted private equity titans and received the maximum allowed amount from the PACs of leading private equity firms such as The Carlyle Group, along with the industry’s trade organization, the American Investment Council (AIC),” CMD reported.
Private equity billionaires have dramatically increased their spending since Sinema decided not to run for reelection this year.
In 2017, as part of then-President Donald Trump’s Tax Cuts and Jobs Act, the length of time needed to trigger the long-term capital gains tax was raised from one year to three just for private equity. The loophole itself was kept in the bill because of fierce industry lobbying, even though Trump groused that those who took the tax break were “getting away with murder.”
Former President Barack Obama and President Joe Biden both pledged to get rid of the unfair tax loophole. Obama never followed through, and Biden dropped the loophole fix from the Inflation Reduction Act due to opposition from Sinema. Anti-tax zealot Grover Norquist compares the situation to a dog chasing a bus. “You didn’t mean to catch the bus, you meant to whine about the bus,” he famously said.
Vice President Kamala Harris, the presumptive Democratic nominee for president, has made few comments so far on private equity and has not yet expressed her views about the carried interest loophole.
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Greg Casar Says There's an Easy Way to Show Which Party Is More Pro-Worker
"Let's see which politicians are for unions and which ones are all talk," said the Texas Democrat.
Jul 16, 2024
As former U.S. President Donald Trump's new running mate and a union leader's speech spark discussions about the Republican Party and organized labor, one Democratic congressman on Tuesday suggested a test to see who is actually pro-worker.
Rep. Greg Casar, a Texas Democrat with a history of
advocating for workers, called for holding a vote on the Richard L. Trumka Protecting the Right to Organize (PRO) Act when his colleagues in Congress return to Capitol Hill next week.
"If Republicans wanna talk like they're pro-worker, then let's have a vote on the PRO Act next week," Casar said on social media. "Let's see which politicians are for unions and which ones are all talk. Dems are ready to vote, how about you guys?"
Introduced by Rep. Bobby Scott (D-Va.) and Sen. Bernie Sanders (I-Vt.), the PRO Act "expands various labor protections related to employees' rights to organize and collectively bargain in the workplace." The vast majority of its co-sponsors are Democrats.
"Dems are ready to vote, how about you guys?"
Casar specifically called out House Speaker Mike Johnson (R-La.) and Sen. Josh Hawley (R-Mo.), who on Tuesday wrote for Compact Magazine about International Brotherhood of Teamsters general president Sean O'Brien's Monday night speech at the Republican National Convention (RNC), acknowledging that it "came as something of a shock."
Hawley called the speech "a watershed moment" and said that "Republicans have a chance to turn the corner on labor." He also took the opportunity to highlight some of his own positions, such as more sick days for rail workers. The senator left out that he has backed "right-to-work" laws that ban union security clauses in collective bargaining agreements and opposed the PRO Act.
O'Brien—who responded by saying that Hawley "is 100% on point"—had, as The Washington Post's Lauren Kaori Gurley put it, "showered praise" on the senator during his speech. The Teamsters leader also stressed the need for pro-worker reforms.
"Labor law must be reformed," O'Brien said. "Americans vote for a union but can never get a union contract. Companies fire workers who try to join unions and hide behind toothless laws that are meant to protect working people but are manipulated to benefit corporations. This is economic terrorism at its best. An individual cannot withstand such an assault. A fired worker cannot afford corporate delays and these greedy employers know it. There are no consequences for the company, only the worker."
He declared that "we need corporate welfare reform. Under our current system, massive companies like Amazon, Uber, Lyft, and Walmart take zero responsibilities for the workers they employ. These companies offer no real health insurance, no retirement benefits, no paid leave, relying on underfunded public assistance. And who foots the bill? The individual taxpayer. The biggest recipients of welfare in this country are corporations, and this is real corruption. We must put workers first."
O'Brien was invited to speak at the RNC by Trump, who on Monday secured enough delegates to become the Republican nominee and announced U.S. Sen. JD Vance (R-Ohio) as his running mate—creating a ticket that Liz Shuler, president of the AFL-CIO, called "a corporate CEO's dream and a worker's nightmare."
Teamsters spokesperson Kara Deniz told the Post that the union leader requested to speak at the Democratic National Convention next month but has not yet received an invitation.
Unlike the Teamsters, several major labor groups endorsed Biden for reelection over a year ago. The Democrat describes himself as "the most pro-union President leading the most pro-union administration in American history"—and he has mostly avoided angering organized labor, other than working with Congress to block a national rail strike in December 2022.
Biden became the first sitting president in history to walk a picket line when he rallied with United Auto Workers members in September. The UAW endorsed him in January, when the group's president, Shawn Fain, sharply criticized Trump and warned that "rarely as a union do you get so clear of a choice between two candidates."
O'Brien struck a much different tone on Monday, praising the ex-president and "characterizing both parties as ambivalent about unions with room to improve," as Post reporter Jeff Stein pointed out on social media. In addition to Sanders, Stein highlighted, "there are 48 Senate sponsors of the PRO Act. They all caucus with the Democratic Party. Zero are Republicans."
Only Sens. Mark Kelly (D-Ariz.), Mark Warner (D-Va.), and Kyrsten Sinema (I-Ariz.)—who ditched the Democratic Party shortly after the 2022 election—have joined with the chamber's Republicans to oppose the PRO Act. In the GOP-controlled House, the bill is backed by every Democrat but just three Republicans: Reps. Lori Chavez-DeRemer (Ore.), Brian Fitzpatrick (Pa.), and Christopher Smith (N.J.).
"On June 21, 2023, the Senate Committee on Health, Education, Labor, and Pensions chaired by Sen. Bernie Sanders passed the PRO Act 11-10," Warren Gunnels, the panel's majority staff director, noted Tuesday. "Every Democrat on the committee voted yes. Every Republican on the committee voted no."
Rep. Becca Balint (D-Vt.) said, "To the Republicans at the RNC who want to appear to support American labor, here's an idea: Come join us to pass the PRO Act."
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Sierra Club Urges Dem Senators to Uphold Biden Clean Vehicle Standards
One campaigner from the green group decried the "dangerous attempt to roll back progress on climate, clean air, and cleaner cars" by some lawmakers skeptical of the new EPA rules.
Apr 11, 2024
The Sierra Club on Wednesday launched a multistate digital ad campaign aimed at persuading seven U.S. senators—six of them Democrats—to back the Biden administration's already weakened tailpipe pollution standards for passenger cars and light-duty trucks.
The new campaign targets Sens. Bob Casey (D-Pa.), John Fetterman (D-Pa.), Tim Kaine (D-Va.), Mark Kelly (D-Ariz.), Kyrsten Sinema (I-Az.), Jon Tester (D-Mt.), and Mark Warner (D-Va.), who have been critical of the Environmental Protection Agency's (EPA) recently finalized federal clean vehicle standards.
"The Sierra Club urges all senators to protect their constituents from toxic vehicle pollution and support these clean car standards that will save families money and give car buyers more choice," Will Anderson, the green group's deputy legislative director, said in a statement.
"The popular clean car standards are the latest commonsense action by the Environmental Protection Agency to tackle our nation's most polluting sector—transportation—and they work," Anderson added. "Trying to undo them is a dangerous attempt to roll back progress on climate, clean air, and cleaner cars that will benefit communities across the country."
Some of the ads are custom-tailored to individual lawmakers. Responding to Fetterman's recent criticism of the new EPA rules, one of the videos argues that "repealing this standard would harm Pennsylvania's growing clean energy economy, undermine efforts to clean up our air, and hurt children and seniors with asthma and other respiratory problems."
"We urge Sen. Fetterman to protect Pennsylvania families who will benefit from this lifesaving standard that will create jobs and give car buyers more options—not Big Polluters and their Republican allies who want to roll back climate progress," the video adds.
The EPA estimates that the new standards will prevent 1 billion tons of greenhouse gas emissions and provide $13 billion in annualized net benefits for consumers and the climate. While some environmentalists have hailed the new rules as the strongest ever of their kind, others argue they don't go far enough.
Dan Becker, director of the Center for Biological Diversity's Safe Climate Transport Campaign, last month claimed that "the EPA caved to pressure from Big Auto, Big Oil, and car dealers and riddled the plan with loopholes big enough to drive a Ford F-150 through."
The new Sierra Club campaign launched the day after a federal appellate panel upheld the Biden administration's 2022 decision to preserve California's strict vehicle emission standards, which have been adopted by 17 states and the District of Columbia. California's mandate is more stringent than the new EPA standards, which set no quotas for zero-emission vehicle sales.
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