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US Senator Elizabeth Warren has demanded that some of the country’s biggest private investment groups give up information about their lobbying efforts to secure tax breaks in Donald Trump’s spending bill, as debate intensifies about the landmark legislation’s winners and losers.
The senator from Massachusetts, one of the leaders of the Democrats’ liberal wing, called on Blackstone, KKR, Apollo Global Management, Bain Capital and Thoma Bravo to provide details on any lobbying and political contributions intended to maintain “special-interest tax loopholes”.
“It is deeply troubling that private equity firms are subsidised through the tax code to juice their profits, exacerbating the industry’s disastrous, rippling effects across multiple industries,” she wrote on Tuesday, giving the five firms until July 2 to respond.
The president is hoping to sign the legislation, which he dubs the “big beautiful bill” by July 4, and called on the Senate to “GET THE DEAL DONE THIS WEEK”, adding that it would make the US “much better off”.
The 1,000-page legislation would slash taxes, reduce social spending and increase federal debt and was approved by the House of Representatives by one vote last month.
Warren’s principal focus is on the so-called carried interest tax loophole, which was preserved by the House version of the legislation and allows private equity and hedge fund managers to be taxed at capital gains rates of 20 per cent, well below the 37 per cent top federal income tax for the highest earners.
Trump had signalled earlier this year that he wanted to kill the loophole, which former presidents Barack Obama and Joe Biden had also considered closing.
While the Democratic minority in Congress lacks the power to subpoena documents and individuals, Warren’s move sought to contrast the tax treatment of private equity with what she described as the prospect of “millions of Americans . . . losing their health insurance and their access to food assistance”.
She sent letters demanding information on Tuesday to Blackstone chief executive Stephen Schwarzman, Apollo CEO Marc Rowan, Thoma Bravo managing partner Orlando Bravo, Bain Capital chair Jonathan Lavine and Joseph Bae and Scott Nuttall, who lead KKR.
Bain 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 worked regularly with members of Congress from both parties. “Extreme tax increases on private investment would kill jobs, increase the deficit, and threaten American innovation,” it added.
Senators are also considering a multibillion-dollar tax break for private credit funds as part of the bill.
That proposal would limit taxes on dividends paid to investors in so-called business development companies, an investment vehicle used by groups including Blackstone, Ares Management and Apollo Global.
However, two industry executives warned that Section 899 of the bill passed by the House, which allows the government to raise taxes on foreign investments in the US, could harm flows of foreign cash into American private capital funds.
The differences between the Senate and the House versions of the bill have raised the possibility that the legislation will not be passed by the president’s self-imposed July 4 deadline.
