August 16, 2022


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Progressive groups across the country are battling a decision by Senator Kirsten Senema, D-Arizona, to remove the interest tax loophole from social spending and a tax law expected to pass through the Senate, claiming it offers a “tax break” for the wealthy.

The Arizona Democratic congresswoman announced Thursday that she will “move forward” in support of Inflation reduction lawThe Senate Democrats’ reconciliation package unveiled last week. As part of the agreement, it succeeded in removing the transfer interest tax clause, which was largely used by wealthy Americans.

In a series of statements submitted to Fox News Digital, progressive groups have taken aim at Sinema’s decision, arguing that the loophole has historically benefited wealthy Americans and should be eliminated.

Cynthia Karizalis, press secretary for the Progressive Change Campaign Committee, insisted that Cinema’s move to remove the reported loophole “only benefits wealthy financiers on Wall Street.”

SINEMA Among Top Private Equity Cash Receivers As It Removed Billionaire Tax Slot From Mansion Bill

Senator Kirsten Senema, an Arizona Democrat, is facing a backlash from progressives over her move to eliminate a carry-on interest tax loophole that wealthy Americans uses from the Inflation Reduction Act.

Senator Kirsten Senema, an Arizona Democrat, is facing a backlash from progressives over her move to eliminate a carry-on interest tax loophole that wealthy Americans uses from the Inflation Reduction Act.
(Al Drago/Bloomberg via Getty Images)

Cynthia Karizalis, press secretary for the Progressive Change Campaign Committee, insisted that Cinema’s move to remove the reported loophole “only benefits wealthy financiers on Wall Street.”

“Senator Cinema’s move to protect a loophole that only benefits wealthy Wall Street financiers looks more like a job application after she lost her next primary than an attempt to help Americans or Americans in Arizona,” Karizalis said. “Fortunately, despite Cinema, Democrats are on track to pass a law for the first time in decades that would finally force tax-avoiding businesses to pay taxes — reducing the burden on working families.”

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

“Senator Cinema’s insistence on maintaining the movable interest tax loophole is an insult to all who pay their fair share of taxes,” Clemente said. “Her support for the tax break for super-rich money managers shocks the conscience.”

Likewise, Americans for Financial Reform, a progressive nonprofit, advocates eliminating the loophole because it mostly benefits people who are “already wealthy.”

A cinema arrives to vote at the US Capitol on August 4, 2022 in Washington, DC.

A cinema arrives to vote at the US Capitol on August 4, 2022 in Washington, DC.
(Drew Angerer/Getty Images)

“The AFR has long sought to completely eliminate this loophole, which primarily benefits people who are already very wealthy,” said Carter Dougherty, director of communications for Americans for Financial Reform. “The bill envisions only very modest changes to this tax item.”

Billing spending targets in Mansion Schumer with tax bills preferred by investors

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

“Kirsten has been clear and consistent for more than a year that she will only support tax reforms and revenue options that support economic growth and competitiveness for Arizona,” her office said in a joint statement with Fox News Digital. “In a time of record inflation, rising interest rates, and slowing economic growth, discouraging investment in Arizona’s business would harm Arizona’s economy and its ability to create jobs. Senator Cinemas makes every decision based on a single criterion: What’s best for Arizona.”

Cinema was widely considered the last senator necessary for Democrats to pass the plan on climate, energy, health care and taxes, which, if made law, would bypass intra-partisan negotiations over the course of a year. With her support, Majority Leader Chuck Schumer of New York State said he expected all 50 Democrats to vote in favor of the measure.

Senate Majority Leader Chuck Schumer, Democrat of New York, speaks with reporters after a closed partisan luncheon, at the Washington Capitol, Tuesday, July 19, 2022.

Senate Majority Leader Chuck Schumer, Democrat of New York, speaks with reporters after a closed partisan luncheon, at the Washington Capitol, Tuesday, July 19, 2022.
(AP Photo/J. Scott Applewhite)

“I am pleased to inform you that we have reached an agreement on the Inflation Reduction Act I think he’s going to have the support of the entire Democratic Senate convention,” Schumer said this week. The final version of the reconciliation bill, which will be introduced on Saturday, will reflect this work and put us another step toward enacting this landmark piece of legislation into law.”

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

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As previously reported, individuals and PACs from the private equity and investment sector to her campaign gave $282,650 in donations this election cycle, making Cinema the sixth largest recipient from the industry in the Senate, according to data compiled by the Center for Responsive Politics. .

Under this loophole, a private equity manager’s income can be taxed as capital gains — a 23.8% tax — instead of ordinary income, which is taxed at 37.9%.

Fox News’ Joe Shufstal, Tyler Olson, and Megan Heaney contributed to this article.



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