Sinema took money from Wall Street while killing taxes from investors – Los Angeles Times | Vette Leader

Sen. Kyrsten Sinema, the Arizona Democrat who single-handedly thwarted her party’s long-standing goal of raising taxes on wealthy investors, was awarded nearly $1 million last year by private equity pundits, hedge fund managers and venture capitalists whose taxes would have risen below the plan.

For years, Democrats have promised to raise taxes on those investors who pay a significantly lower rate on their earnings than regular workers. But just as they neared that goal last week, Sinema forced a series of changes to her party’s $740 billion election-year spending package, eliminating a proposed “carried interest” tax hike on private equity earnings and simultaneously a $35 billion exemption secured that will save much of the industry a separate tax hike that other big corporations now have to pay.

The bill, with Sinema’s amendments intact, received final approval from Congress on Friday and is expected to be signed into law by President Biden next week.

Sinema has long served the interests of private equity, hedge funds and venture capital, helping her raise at least $1.5 million in campaign funds since she was elected to the House of Representatives a decade ago. But the $983,000 she’s raised since last summer more than doubled what the industry gave her in all her previous years combined in Congress, according to an Associated Press report on campaign finance disclosure.

The donations, which make Sinema one of the industry’s main beneficiaries in Congress, are a reminder that high-level lobbying campaigns can have a dramatic impact on how legislation is drafted, especially in the evenly divided Senate, where there are no Democrats votes left. They also stress some political risk for Sinema, whose uncompromising defense of the industry’s favorable tax treatment is seen by many in her party as unjustifiable.

“From their perspective, it’s a million dollars very well spent,” said Dean Baker, senior economist at the Center for Economic and Policy Research, a liberal-leaning think tank. “It’s pretty rare that you see such a direct return on your investment. So I guess I would congratulate them.”

Sinema’s office declined to make her available for an interview. Hannah Hurley, a Sinema spokeswoman, acknowledged that the senator shares some of the industry’s views on taxation, but dismissed any suggestion that the donations influenced her thinking.

“Senator Sinema makes every decision based on one criterion: what is best for Arizona,” Hurley said in a statement. “She has clearly and consistently stated for over a year that she will only support tax reforms and revenue options that support Arizona’s economic growth and competitiveness.”

Sinema’s defense of tax rules stands in stark contrast to her background as a Green Party activist and self-proclaimed “Prada socialist” who once likened taking campaign funds to “bribery” and later demanded that “big corporations and the rich pay their fair price.” . share” just before launching their first campaign for the congress in 2012.

She’s been far more generous since then, commending House of Representatives Private Equity in 2016 for providing “Billions of dollars each year to Main Street companies” and later doing an internship at a private’s boutique winery during the 2020 convention break -Equity moguls in Northern California.

The increase in industry grants to Sinema dates back to last summer. It was at this point that she made it clear for the first time that she would not support an increase in the carried-interest tax, as well as other corporate and business tax hikes included in an earlier iteration of Biden’s agenda.

In just a two-week period in September alone, Sinema raised $47,100 in contributions from 16 senior officials at private equity firm Welsh, Carson, Anderson & Stowe, records show. Employees and executives at KKR, another private equity giant, donated $44,100 to Sinema over a two-month period in late 2021.

In some cases, the families of private equity managers have joined. David Belluck, a partner at Riverside Partners, donated a maximum of $5,800 to Sinema in one day in late June. Three of his college-age children did, too, and the family collectively donated $23,200, records show.

“I generally support centrist Democrats and their seat is important to retain a Democratic Senate majority,” Belluck said, adding that his family has known Sinema since she was elected to Congress. “You and I have never discussed private equity taxation.”

The industry donations coincide with a $26 million lobbying effort led by investment firm Blackstone that culminated in the Senate last weekend. By the time the bill came up for debate during a marathon series of votes, Sinema had already forced Democrats to abandon their carried-interest tax hike.

“Senator Sinema said she would not vote for the bill … unless we take it out,” Senate Majority Leader Charles E. Schumer told reporters last week. “We had no choice.”

But after private-equity lobbyists discovered a provision in the bill that would have subjected many of them to a separate 15% minimum tax, they urged changes to the law, according to emails from Sinema and other center Democrats, as well as four people with direct knowledge Matter asking for anonymity to discuss internal deliberations.

“Given the groundbreaking nature of this development, we need as many offices as possible to raise concerns about Leader Schumer’s office,” Blackstone lobbyist Ryan McConaghy wrote in an email received by the AP on Aug. 6, which included proposed language for included the amendment to the bill. “Would you and your boss be willing to sound the alarm about this and express concerns to Schumer and his team?”

McConaghy did not respond to a request for comment.

Sinema worked with Republicans on an amendment that would scrap provisions raising corporate income taxes from the law, which a handful of vulnerable Democrats also voted in favor of.

Liberal activists in Arizona plan to make Sinema’s reliance on donations from wealthy investors a campaign issue when she faces re-election in 2024.

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