Comment Sen. Kyrsten Sinema (D-Ariz.) said she would soon be ready to “move forward” on a revised version of Senate Democrats’ health care, climate and deficit reduction package after party leaders agreed to trim some of their initial tax proposals. The new approach — along with other changes to the proposal known as the Inflation Reduction Act of 2022 — satisfied Sinema’s main concerns and helped set in motion a plan to pass it as soon as this weekend. In a statement, Sinema said Democrats had “agreed to remove” a key tax policy aimed at wealthy investors that was intended to address what is known as the “carried interest loophole.” He also said they had made additional changes to a second provision aimed at imposing a new minimum tax on companies that currently pay nothing to the US government. The revisions will benefit manufacturers, according to two people familiar with the matter, who spoke on condition of anonymity to describe the undisclosed details. As part of it, Democrats have chosen to pursue a new 1 percent tax on corporate stock purchases, a move that would account for at least some of the revenue that might have been lost as a result of the changes, the two people familiar with the matter said. . And they agreed to allocate new money at Sinema’s request to respond to climate issues, including drought, the sources said. From here, Sinema said he would wait for a final review by the House lawmaker — a critical step in the process that allows Democrats to advance their spending bill — at which point he would “move forward.” How the Schumer-Manchin climate bill could affect you and change the US The overall changes appear to have helped Democratic leaders thread a tight needle, satisfying Sinema while maintaining momentum for the deal that Senate Majority Leader Charles E. Schumer (DN.Y.) worked out with another moderate — Sen. Joe Manchin III (DW.Va.) — just last week. In recent days, Manchin had remained steadfast in his support for the deal that was struck, the original version of which was expected to generate more than $768 billion in revenue over the next decade. Any change to relieve Sinema threatened to reduce the roughly $300 billion expected to be available for deficit reduction, a major issue for Manchin. Democrats did not offer a new estimate of their revised tax policies late Thursday. In a statement, however, Schumer said he expected to “get the support of the entire Senate Democratic conference.” And he said the bill would reduce the deficit by $300 billion. Under the new plan, Democrats are now seeking to impose a new tax on the money companies spend on stock buybacks, according to a Democratic adviser familiar with the matter who spoke on condition of anonymity to describe the measure. Party lawmakers have long opposed such practices, arguing they benefit the stock prices of big business at the expense of workers and the economy at large. In adding the new proposal, Democrats also appeared to be reconsidering their original plans to impose a 15 percent minimum tax on corporations. The exact details of the change are unclear, but Sinema said in a statement that its deal would “protect advanced production.” And Democrats dropped their proposal to target taxes that apply to private equity and hedge fund managers, an effort to close what’s known as the “carrying interest loophole.” Initially, the bill sought to change the way these investors are taxed on the fees paid to them by their clients, subjecting them to higher rates. But they scrapped their original plans in response to Sinema, who said he would work with Sen. Mark R. Warner (D-Va.) to address the issue while “protecting investment in America’s economy” and closing “the more frightening loopholes that some abuse to avoid paying taxes.”
