Democratic Senator threatening to block the party’s ambitious social policy agenda to preserve former President Donald Trump’s tax cuts for businesses and the wealthy spent last summer on internship in a cellar owned by the capital baron Bill Price investment.
In the summer of 2020, Senator Kyrsten Sinema, D-Arizona, interned at Three Sticks, a winery in Sonoma, Calif. Owned by Bill Price, co-founder of leviathan TPG Capital. According to the job description, trainees “assist in all facets of harvesting work, including cleaning and disinfection of equipment, fruit sorting, disassembly, basic additions and management of fermentations according to the instructions of the winemaker, barrel work and other cellar related tasks ”.
Sinema’s personal financial statements show that she received a salary of $ 1,117.40 for her work. But a subsequent fundraiser at Three Sticks, held in August, added to her campaign coffers much more.
Over the past two years, Sinema has received at most tens of thousands of dollars in donations from private equity partners such as Price and CEOs of investment firms. Now, many of those same senior corporate executives stand to lose millions to the IRS if a bill targeting the deferred interest tax loophole is included in the Senate budget reconciliation process. These executive donors include the senior directors of TPG and billionaire Blackstone’s CEO Jonathan Gray.
Sponsored by the Senses. Ron Wyden and Sheldon Whitehouse, the Ending the Carried Interest Loophole Act would require hedge fund managers and private equity executives to pay taxes on their income at the same rates as other workers, thus ending the privileged treatment of such executives . Currently, their remuneration is not considered income. Rather, it is classified as a tax-deferred capital gain, subject to much lower rates, despite its almost identical function.
In June, the private equity industry lobby launched a lobbying campaign targeting Sinema and fellow Arizona senator Mark Kelly to leave the deferred interest tax loophole intact.
The Joint Committee on Taxation estimates that the bill would raise more than $ 63 billion over 10 years, constituting a significant portion of the salary – taxes used to offset new spending – in the budget reconciliation plan proposed by the $ 3.5 trillion Democrats. Sinema has repeatedly described the plan as too expensive.
Several congressional aides who spoke to The Intercept on condition of anonymity said Sinema’s office had not said whether or not she would support closing the loophole, despite concerns about the price of the project. her party’s budget reconciliation law and the considerable sums she carried. interest tax could increase.
Before opening his winery, Price co-founded TPG, one of the world’s largest private equity firms, in 1992. Despite announcing his departure from TPG in 2006, Price listed TPG as his employer in an Election Commission file Federal Council of 2020 with the title of “Partner Emeritus.” A spokesperson for Price told The Intercept, “Bill Price has no longer any affiliation with TPG and has been for a decade.” When shown a copy. of the FEC file, the same spokesperson did not respond for further comment. In 2019, during the college admissions scandal, Price’s connection to the company resurfaced when he defended Bill McGlashan, the husband of his wife’s sister and a senior partner of TPG whom he brought to the company in 2004. TPG did not respond to multiple requests for comment.
Last week, Sinema announced his explicit opposition to another critical budget reconciliation revenue mechanism: the Democrats’ drug pricing plan, which various estimates could save the government between $ 450 billion and $ 700 billion out of 10. years. In July, Senator Mitch McConnell called Sinema’s rejection of the price to pay for budget reconciliation “very courageous.”
As the Daily Poster first reported, Sinema, which has raised more than $ 500,000 from the pharmaceutical and health products industry, was featured in advertisements by a black money group funded by the pharmacy just before making public its opposition to the legislation on the price of drugs. Data from the Center for Responsive Politics shows that since joining Congress, Sinema has also raised more than $ 6 million in donations from the finance, insurance and real estate industries.
Earlier this month, the Chamber of Commerce released a report saying closing the deferred interest tax loophole would cost nearly 5 million jobs and create billions in tax deficits.
“The deferred interest loophole rewards a narrow class of workers, the fund managers, whose compensation is already in the stratosphere compared to almost everyone, with a very low income tax rate. It’s indefensible, ”Bob Lord, tax advisor at Americans for Tax Fairness, told The Intercept.
“Deferred interest also allows fund managers to defer tax on their compensation until the fund’s investments are sold. The rest of us are paying taxes on our income from work now, not years later, ”Lord said. “Chamber of Commerce apologists justify this travesty by claiming that the country would lose jobs if fund managers paid taxes at the same rate as the rest of us. Using this logic, why should we not reduce their rate to zero? More jobs, right? Or maybe the IRS should pay them? Even more jobs, right? How a member of Congress would take the Chamber of Commerce seriously here puzzles me. “
In relation to her Fellow Democrats and corporate donors, Sinema’s personal financial information is scarce. His 2020 file lists two pension plans, a dormant consulting business, and income generated from a teaching job at Arizona State University, as well as his meager internship income. This puts Sinema’s personal finances in stark contrast to the income generated by congressional allies like Joe Manchin, who has earned millions of dollars from his coal interests over the past decade.
However, when it comes to raising funds for the campaign, few surpass Sinema’s zeal for fundraising and phone banking. According to several Democrats who served with Sinema in the House, she was the only member who seemed to actively enjoy being in the call center of the Democratic Congressional Campaign Committee, claiming a sofa for her personal use and complaining to other members. when they had to leave. vote.
In 2020, she gave a keynote speech followed by fundraising at SFVegas, the lavish securities conference held at the Aria Resort and Casino in Las Vegas and featured in the movie “The Big Short”. Former British Prime Minister Theresa May was headlining at last year’s conference.
Sinema spoke at a Women in Securitization event ahead of a fundraising reception sponsored by the Structured Finance PAC, which donated tens of thousands of dollars to powerful members of the House Financial Services Committee such as representatives Gregory Meeks and Carolyn Maloney. Sinema’s recent votes and public stance suggest that the money and advertising blitz launched by financial industry lobbyists may have achieved the desired effect.
In August, Sinema was the only Democrat to vote against an amendment to “establish a reserve fund to protect family farms, ranches and small businesses while ensuring that the rich pay their fair share.” A day later, she voted against “a reserve fund for increasing the progressivity of the tax code”.
Sinema’s dramatic right-wing turn to finance and pharmaceutical barons at the cost of gradual tax reform stands in stark contrast to her childhood story, in which she recounts growing up in an abandoned gas station with no electricity or running water, at one time live from a car.
In response to a colleague’s expression of support after an NPR story detailing her family’s financial difficulties, Sinema, then a representative, speaking to colleagues in the Democratic locker room just off the House floor, said is shown impassive, “Yeah, voters love that stupid shit.” They eat it.