A Fake Deal
Sen. Kyrsten Sinema goes to the Bank.
Carried interest rate loophole remains intact.
Sen. Kyrsten Sinema asked her corporate donors what they didn’t like about the proposed Inflation Reduction Act (2) and to reassure their concern over ‘losing the carried interest rate loophole’ (3), she agreed to removing the tightening of the loophole, and agreed to substituting a 1% minimum tax on corporate stock buybacks and drought funding benefitting her region to ‘make up the shortfall.’
Deal done.
Hold on.
Before we hear the champagne bottle cork popping, consider that someone will pay for carving out interest rate pass-alongs: debtors and investors. (4)
That’s essentially the rest of America.
By transferring risk from profiteer to citizen in the form of lost public benefit opportunity, the sacrifice is disproportionately borne by the 99%.
What is public benefit opportunity? In a transfer of wealth from the rich to the less advantaged in the form of funding and sustaining social benefit by disproportionately taxing the wealthy, all citizens gain.
Dependency on borrowing against future or long-term wealth for public benefit is reduced.
The higher corporate and wealthy tax rate countries are exhibit A of a more equitable burden-sharing. Countries, where citizen majorities attest to feeling secure, happy.
Senator Sinema, parroting her wealthy donors, is comfortable with disproportionately passing the cost of sustaining public programs like expanding ACA and climate justice onto the already burdened 99%.
In this light the Inflation Reduction Act is a short-term fix and factoring in years of social neglect a rather limited one at that (5)
Wonder why all the corporate media hoopla over how the Inflation reduction Act is a big deal?
What doesn’t the 99% see in this legislation?
If Democrats are unable to minimally reduce tax loopholes of the wealthy, what are we missing?
Apparently, lots.
Friends chasten my critique of the Inflation Reduction Act, advising me that my reluctance to break open the champagne is simply playing to the opponents’ position that nothing Democrats accomplish is worthy. I am accused of maligning the ‘Democratic agenda.’
To quote my older, wiser sister, “that’s like the pot calling the kettle black.” Why harp on partisanship when none is in play? The Inflation Reduction Act is going to pass, right?
To say that I and other critics of social cost leveraging are “doomsayers” misses the point.
Consider not borrowing against a less than perfect future.
Some folks in Kentucky are homeless tonight.
And tomorrow night.
August 7
Notes
1-”Carried Interest Is Back in the Headlines. Why It’s Not Going Away.”
https://www.nytimes.com/2022/08/05/business/economy/carried-interest-kyrsten-sinema.html?referringSource=articleShare
2-Lauren Elizabeth, “Let’s Talk About What’s Actually in the Manchin-Schumer Reconciliation Bill,” August 6, Medium
3- “Carried interest loophole,”
https://www.google.com/search?q=carried+interest+loophole&ie=UTF-8&oe=UTF-8&hl=en-us&client=safari
4-Apparently not wealthy foundations, high tuition colleges and union underfunded pensions.
