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US Sen. Elizabeth Warren has requested that some of the nation’s largest private investment groups waive information on lobbying to secure tax credits for Donald Trump’s spending bill.
One of the Democratic liberal wing leaders, Massachusetts senators, called on Blackstone, KKR, Apollo Global Management, Bain Capital and Tohma Bravo to provide details on lobbying and political contributions aimed at maintaining a “special tax loophole.”
“It is very troublesome when private equity companies are subsidized through tax laws to juice profits, exacerbating the miserable and rippling effects of the industry.
The president hopes to sign a law that will remain on the “big beautiful bill” by July 4th, calling on the Senate to “get this week’s deal” and adding that it will “make the US much better.”
The 1,000-page law cuts taxes, reduces social spending, increases federal debt, and was approved by the House of Representatives by one vote last month.
Warren’s main focus lies in the loopholes in what is called carried interest tax. This is preserved by the House version of the law and allows private equity and hedge fund managers to be taxed at a capital gain rate of 20%.
Earlier this year, Trump said he wanted to kill a loophole that former presidents Barack Obama and Joe Biden were also considering shutting down.
Although the Democratic minority of Congress has no authority to document and personal summon power, Warren’s move attempted to compare the tax treatment of private equity with what she described as the outlook that “millions of Americans lose health insurance and access to food aid.”
She led KKR in a letter requesting information Tuesday with Blackstone CEO Stephen Schwartzman, Apollo CEO Mark Rowan, Orlando Bravo, managing partner of Thoma Bravo, Jonathan Labine of Bain Capital Chairs, Joseph Beh and Scott Nattool.
Bane and Blackstone declined to comment. Apollo, KKR and Thoma Bravo did not respond to requests for comment.
The American Investment Council Industry Lobby Group said it regularly worked with members of the council of both parties. “An extreme tax hike in private investment will kill jobs, increase deficits and threaten US innovation,” he added.
The senator is also considering a multi-billion dollar tax cut in private credit funds as part of the bill.
The proposal limits taxes on dividends paid to investors in so-called business development companies, an investment tool used by groups such as Blackstone, Ares Management and Apollo Global.
However, two industry leaders warned that Section 899 of Bill 899, passed in the House, that governments could raise taxes on foreign investment in the United States, could undermine foreign cash flows to American private capital funds.
The difference between the Senate and House versions of the bill raised the possibility that the President’s July 4 deadline would not pass the law.
