Posted on Nov 17, 2021, 11:31 AM
American lobbyists hired by the private equity heavyweights have made the White House bend. It is Jared Bernstein, the principal economic adviser to Joe Biden, who affirms it. After spending hundreds of millions of dollars in the last presidential and legislative campaign, the Carlyles, KKR, Blackstones and Apollos of the unlisted industry managed to blow up the tax reform aimed at increasing the taxation of their families for the umpteenth time. capital gains.
Despite the recurring attacks from the Democratic left wing by Senator Elizabeth Warren, the unlisted industry remains all-powerful and the big tax night has not taken place. After injecting $ 649 billion into the economy last year in the midst of the pandemic, it has at the time of the resumption of an important lever vis-à-vis the administration: the nearly 750 billion dollars that it still has to be deployed in the coming years, according to figures from the American Investment Council, which defends the interests of the industry. And through its holdings, the sector employs nearly 12 million Americans.
“It’s a niche [fiscale] that must absolutely disappear, Jared Bernstein had recognized on CNBC, but when you go to Capitol Hill [quartier qui abrite le Congrès des Etats-Unis, NDLR] and as you start to negotiate on taxes, there are more lobbyists in this city who are experts in tax matters than there are members of Congress ”.
Hundreds of millions in lobbying spending
This new attempt at tax revision was however modest. It aimed to bring back 14 billion dollars – within the framework of a budget bill of 3.500 billion – by modifying the taxation of “carried interest”, the share of capital gains on sale received by fund managers. More specifically, the reform proposed to extend the minimum period for holding participations from 3 to 5 years, if they wanted to continue to benefit from an advantageous tax rate (25% against more than 39%).
However, even this modest reform failed to be supported. It must be said that in the heat of the market, managers are again turning their assets much faster, around three years.
“I believe that one does not take too many risks by saying that nothing will change on the carried, declares to the” Echoes “Todd G. Betor, tax lawyer of the firm Winston & Straw in Washington, without excluding that the subject is of again debated. Maintaining the measure would have slowed down the entire process of examining the tax reform, which is already very dense. The majority was too fair and there were not enough representatives pushing to reform the texts in Congress. Democrats were not completely aligned with tax reform ”.
In the last presidential election, investment funds and hedge funds paid some $ 625 million in political expenses during the campaign. Never has such a large amount been spent over a two-year election cycle by the private equity industry, according to a study by Americans for Financial Reform.
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