Politics

‘Squad’ Socialists Silent On Major Tax Loophole Helping Richest Americans

Chip Somodevilla/Getty Images

Michael Ginsberg Congressional Correspondent
Font Size:

The most prominent left-wing members of the Democratic Party have recently been silent on a key tax provision that benefits some of the wealthiest Americans and is not addressed by the Build Back Better package.

The carried-interest rate, long a target of the left, allows individuals working in the financial industry to pay a lower tax rate. It is a type of performance bonus, in which investment managers are paid based on the profits their clients’ investments earn in a given year. The payment structure is popular with Wall Street firms, since it encourages money managers to improve their investment strategies, and because carried-interest is taxed at a rate of 23.8%, instead of the standard 37% income tax rate.

Former President Donald Trump criticized the tax provision, asserting that it allowed hedge fund managers to “get away with murder.” Despite Trump’s position, the 2017 Tax Cuts and Jobs Act did not raise the carried-interest tax rate, although it did increase the amount of time fund managers are required to hold investments before they cash them at the lower rate. (RELATED: ‘It’s A Swamp’: JP Morgan CEO Compares Post-COVID-19 Challenge To World War II)

Left-wing members, including Independent Vermont Sen. Bernie Sanders and Democratic New Jersey Rep. Bill Pascrell, have promoted legislation in the current Congress that would eliminate the provision and treat carried-interest as ordinary income, but it is not included in the reconciliation package. The package does raise the corporate interest rate to 15% and creates a surtax on the incomes of some of the wealthiest Americans. However, it also raises the State and Local Tax (SALT) deduction cap to $80,000 a year.

WASHINGTON – SEPTEMBER 06: (L-R) Sen. John D. Rockefeller (D-WV), Sen. Max Baucus (D-MT) and Sen. Chuck Grassley (R-IA) listen to testimony from (R-L) Alan Auerbach, director of the Center for Tax Policy and Public Finance at the University of California, Russell Read, chief investment officer with the California Public Employees Retirement System, and Donald Trone, president of the Foundation for Fiduciary Studies during a Senate Finance Committee hearing on Capitol Hill September 6, 2007, in Washington DC. The hearings focus is on issues related to the taxation of carried interest income received by some investment fund managers. (Photo by Mark Wilson/Getty Images)

Sanders has called for the reconciliation bill to require the “very wealthy [to] finally pay their fair share,” but he has been silent on the decision of lawmakers to leave the carried-interest rate untouched in Build Back Better. The non-partisan Congressional Budget Office estimated in 2018 that eliminating the provision would raise about $14 billion in tax revenue over a decade.

Sanders did not respond to multiple requests for comment on the provision from the Daily Caller.

Left-wing Democrats in the House, some of Sanders’ closest allies, have also been quiet on the carried-interest rate amid the Build Back Better negotiations.

The ‘Squad,’ New York Rep. Alexandria Ocasio-Cortez, Minnesota Rep. Ilhan Omar, Massachusetts Rep. Ayanna Pressley, and Michigan Rep. Rashida Tlaib, have all expressed opposition to the provision. The four co-sponsored the Stop Wall Street Looting Act in 2019, which would have eliminated carried-interest. The bill died in the Ways and Means Committee.

“People who have worked hard their whole lives to earn a pension deserve to be able to rely on that money still being there when they retire,” Tlaib said at the time. “They do not deserve greedy Wall Street firms raiding their earnings and playing games with their futures.”

However, like Sanders, none of the four have spoken up about the provision in the context of Build Back Better negotiations. Instead, they have taken aim at SALT and the bipartisan Infrastructure Investment and Jobs Act (IIJA), which passed the Senate in June.

Ocasio-Cortez, Omar, Pressley, and Tlaib did not respond to multiple requests for comment on the provision from the Daily Caller.

PREMIUM ARTICLE: Subscribe To Keep Reading

Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign Up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
BENEFITS READERS PASS PATRIOTS FOUNDERS
Daily and Breaking Newsletters
Daily Caller Shows
Ad Free Experience
Exclusive Articles
Custom Newsletters
Editor Daily Rundown
Behind The Scenes Coverage
Award Winning Documentaries
Patriot War Room
Patriot Live Chat
Exclusive Events
Gold Membership Card
Tucker Mug

What does Founders Club include?

Tucker Mug and Membership Card
Founders

Readers,

Instead of sucking up to the political and corporate powers that dominate America, The Daily Caller is fighting for you — our readers. We humbly ask you to consider joining us in this fight.

Now that millions of readers are rejecting the increasingly biased and even corrupt corporate media and joining us daily, there are powerful forces lined up to stop us: the old guard of the news media hopes to marginalize us; the big corporate ad agencies want to deprive us of revenue and put us out of business; senators threaten to have our reporters arrested for asking simple questions; the big tech platforms want to limit our ability to communicate with you; and the political party establishments feel threatened by our independence.

We don't complain -- we can't stand complainers -- but we do call it how we see it. We have a fight on our hands, and it's intense. We need your help to smash through the big tech, big media and big government blockade.

We're the insurgent outsiders for a reason: our deep-dive investigations hold the powerful to account. Our original videos undermine their narratives on a daily basis. Even our insistence on having fun infuriates them -- because we won’t bend the knee to political correctness.

One reason we stand apart is because we are not afraid to say we love America. We love her with every fiber of our being, and we think she's worth saving from today’s craziness.

Help us save her.

A second reason we stand out is the sheer number of honest responsible reporters we have helped train. We have trained so many solid reporters that they now hold prominent positions at publications across the political spectrum. Hear a rare reasonable voice at a place like CNN? There’s a good chance they were trained at Daily Caller. Same goes for the numerous Daily Caller alumni dominating the news coverage at outlets such as Fox News, Newsmax, Daily Wire and many others.

Simply put, America needs solid reporters fighting to tell the truth or we will never have honest elections or a fair system. We are working tirelessly to make that happen and we are making a difference.

Since 2010, The Daily Caller has grown immensely. We're in the halls of Congress. We're in the Oval Office. And we're in up to 20 million homes every single month. That's 20 million Americans like you who are impossible to ignore.

We can overcome the forces lined up against all of us. This is an important mission but we can’t do it unless you — the everyday Americans forgotten by the establishment — have our back.

Please consider becoming a Daily Caller Patriot today, and help us keep doing work that holds politicians, corporations and other leaders accountable. Help us thumb our noses at political correctness. Help us train a new generation of news reporters who will actually tell the truth. And help us remind Americans everywhere that there are millions of us who remain clear-eyed about our country's greatness.

In return for membership, Daily Caller Patriots will be able to read The Daily Caller without any of the ads that we have long used to support our mission. We know the ads drive you crazy. They drive us crazy too. But we need revenue to keep the fight going. If you join us, we will cut out the ads for you and put every Lincoln-headed cent we earn into amplifying our voice, training even more solid reporters, and giving you the ad-free experience and lightning fast website you deserve.

Patriots will also be eligible for Patriots Only content, newsletters, chats and live events with our reporters and editors. It's simple: welcome us into your lives, and we'll welcome you into ours.

We can save America together.

Become a Daily Caller Patriot today.

Signature

Neil Patel