(TheConservativeNews.org) – It has been discovered that Sen. Kyrsten Sinema AZ(D)received nearly $1 million over the past year from private equity professionals, hedge fund managers and venture capitalists whose taxes would have increased under the plan.
Democrats have promised to raise taxes on such investors for years. These investors pay a significantly lower rate on their earnings than ordinary workers. Just as they closed in on 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 increase on private equity earnings while securing a $35 billion exemption that will spare much of the industry from a separate tax increase other huge corporations now have to pay.
The bill, with Sinema’s alterations intact, was given final approval by Congress on Friday and is expected to be signed by President Joe Biden next week.
Since she was elected to the House a decade ago, Sinema has long aligned herself with the interests of private equity, hedge funds and venture capital, helping her net at least $1.5 million in campaign contributions. The $983,000 she has collected since last summer more than doubled what the industry donated to her during all of her preceding years in Congress combined.
The donations, which make Sinema one of the industry’s top beneficiaries in Congress, serve as a reminder of the way that high-power lobbying campaigns can have dramatic implications for the way legislation is crafted, particularly in the evenly divided Senate where there are no Democratic votes to spare. They also highlight a degree of political risk for Sinema, whose unapologetic defense of the industry’s favorable tax treatment is viewed by many in her party as indefensible.
“From their vantage point, it’s a million dollars very well spent,” said Dean Baker, a senior economist at the Center for Economic and Policy Research, a liberal-leaning think tank. “It’s pretty rare you see this direct of a 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 spokesperson, acknowledged the senator shares some of the industry’s views on taxation but rebuffed any suggestion that the donations influenced her thinking.
“Senator Sinema makes every decision based on one criterion: what’s best for Arizona,” Hurley said in a statement. “She has been clear and consistent for over a year that she will only support tax reforms and revenue options that support Arizona’s economic growth and competitiveness.”
The American Investment Council, a trade group that lobbies on behalf of private equity, also defended its push to defeat the tax provisions.
“Our team worked to ensure that members of Congress from both sides of the aisle understand how private equity directly employs workers and supports small businesses throughout their communities,” Drew Maloney, the organization’s CEO and president, said in a statement.
Sinema’s defense of the tax provisions offers a jarring contrast to her background as a Green Party activist and self-styled “Prada socialist” who once likened accepting campaign cash to “bribery” and later called for “big corporations & the rich to pay their fair share” shortly before launching her first campaign for Congress in 2012.
The soaring contributions from the industry to Sinema trace back to last summer. That’s when she first made clear that she wouldn’t support a carried interest tax increase, as well as other corporate and business tax hikes, included in an earlier iteration of Biden’s agenda.
After private equity lobbyists discovered a provision in the bill that would have subjected many of them to a separate 15% corporate minimum tax, they urgently pressed Sinema and other centrist Democrats for changes, according to emails as well as four people with direct knowledge of the matter who requested anonymity to discuss internal deliberations.
Liberal activists in Arizona say they plan to make Sinema’s reliance on donations from wealthy investors a campaign issue when she is up for reelection in 2024.