Sinema Pays Off Her Donors
By Dick Morris on August 5, 2022
Senator Kristen Sinema (D-AZ) pretended to be upset at the tax increases in the Democratic reconciliation bill and feigned independence. But she was conning us all along.
She was really holding out to fulfill a corrupt bargain with her richest supporters and major campaign donors. At the expense of the average taxpayer, she held back her approval of the Democratic reconciliation package so her rich supporters could skate by paying minimal taxes. Her conduct was so odious that it makes even the Washington swamp look bad.
Her goal was to preserve the carried interest treatment of income earned by managers of hedge funds. The Democrats had eliminated this loophole and Sinema, doing the bidding of her financial backers, refused to agree to the Democratic bill unless carried interest was restored. This tax loophole costs the rest of us $14 billion and confers benefit on a few thousand very rich people.
Hedge fund investors who make investments that earn them money get to pay taxes on their winnings through the capital gains tax, usually paying only 20% of their earnings, a tax break from having to pay regular tax on earned income where the rate tops out at 37%.
They deserve this tax break. After all, they paid income tax on the money they invest so paying any tax at all on their winnings is really double taxation. But at least they have only to pay 20% not the full 37%.
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