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Progressive groups across the country are criticizing Sen. Kyrsten Sinema, D-Ariz.’s decision to remove the savings tax loophole in the Senate Social Spending and Taxation Act, saying it offers “tax breaks.” for the rich.
The Arizona Democrat announced Thursday that she would “move forward” with the confirmation Anti-Inflation Act, the reconciliation package that Senate Democrats introduced last week. As part of the deal, it successfully eliminated an interest tax reserve that was heavily used by wealthy Americans.
In a series of statements presented to Fox News Digital, progressive groups took aim at Sinema’s decision, arguing that the gap had historically benefited wealthy Americans and should be closed.
Cynthia Carrizales, press secretary for the Campaign Committee for Progressive Change, insisted that Sinema’s move to close the loophole “will only benefit wealthy Wall Street financiers.”
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Sen. Kyrsten Sinema, D-Ariz., is facing backlash from progressives for trying to close the savings tax loophole used by wealthy Americans under the Inflation Reduction Act. (Al Drago/Bloomberg via Getty Images)
Cynthia Carrizales, press secretary for the Campaign Committee for Progressive Change, insisted that Sinema’s move to close the loophole “will only benefit wealthy Wall Street financiers.”
“Senator Sinema’s move to protect a loophole that only benefits wealthy Wall Street financiers sounds more like looking for a job after losing another elementary school than trying to help ordinary Arizonans or Americans,” Carrizales said. “Happily, despite Sinema, Democrats are on track to pass legislation for the first time in decades that will finally force tax-evading companies to pay taxes — thereby reducing the burden on working families.”
Frank Clemente, executive director of Americans for Tax Fairness, said Sinema’s decision was an “insult” to American taxpayers.
“Senator Sinema’s insistence on maintaining the interest tax loophole is an insult to anyone who pays their fair share of taxes,” Clemente said. “Your support for a tax break that only benefits the ultra-wealthy wealth managers is conscience-shaking.”
Similarly, the progressive nonprofit Americans for Financial Reform advocate eliminating the loophole entirely because it primarily benefits people who are “already wealthy.”
Sinema arrives to vote at the US Capitol in Washington, DC on August 4, 2022. (Drew Angerer/Getty Images)
“AFR has long advocated closing this loophole entirely, which will benefit people who are already very wealthy,” said Carter Dougherty, director of communications for Americans for Financial Reform. “The bill made only very modest changes to this tax rule.”
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But Sinema’s office argued that the senator was doing “what’s best for Arizona,” concluding that discouraging business investment could be fatal to the economy.
“For more than a year, Kyrsten has clearly and consistently stated that she will only support tax reforms and revenue opportunities that support Arizona’s economic growth and competitiveness,” her office said in a statement shared with Fox News Digital. “At a time of record inflation, rising interest rates and slowing economic growth, discouraging investment in Arizona businesses would hurt Arizona’s economy and ability to create jobs. Senator Sinema makes every decision based on one criterion: what is best for Arizona.”
Sinema was widely viewed as the last senator Democrats needed to pass a climate, energy, health and tax plan that, if passed into law, would cap more than a year of intra-party negotiations. With their support, Majority Leader Chuck Schumer, DN.Y., said he expects all 50 Democrats to vote for the measure.
Senate Majority Leader Chuck Schumer, DN.Y., speaks to reporters Tuesday, July 19, 2022 after a closed-door luncheon at the Capitol in Washington. (AP Photo/J Scott Applewhite)
“I am pleased to report that we have reached agreement on legislation to reduce inflation, which I believe will have the support of the entire Senate Democratic conference,” Schumer said this week. “The final version of the Reconciliation Act, presented Saturday, will reflect that work and bring us one step closer to passing this historic law.”
Sinema’s move is a win for the private equity industry, which is pouring large sums into her campaign coffers.
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As previously reported, individuals and political action committees from the private equity and investment sectors have contributed $282,650 to her campaign this election cycle, making Sinema the sixth-largest recipient in the industry, according to data compiled by the Center for Responsive Politics. .
Under this gap, a private equity manager’s income can be taxed as capital gains – which is taxed at 23.8% – rather than ordinary income, which is taxed at 37.9%.
Fox News’ Joe Schoffstall, Tyler Olson, and Megan Henney contributed to this article.
Kyle Morris covers politics for Fox News. On Twitter: @RealKyleMorris.
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