The latest effort to narrow the preferential tax treatment used by private equity executives failed after Senator Kyrsten Sinema objected.
WASHINGTON — Once again, carried interest carried the day.
The last-minute removal by Senate Democrats of a provision in the climate and tax legislation that would narrow what is widely referred to as the “carried interest loophole” represents the latest win for the private equity and hedge fund industries. For years, those businesses have successfully lobbied to kill bills that aimed to end or limit a quirk in the tax code that allows rich executives to pay lower tax rates than many of their salaried employees.
In recent weeks, it appeared that the benefit could be scaled back, but a last-minute intervention by Senator Kyrsten Sinema, the Arizona Democrat, eliminated what would have been a $14 billion tax increase targeting private equity.
The failure of lawmakers to address a tax break that Democrats and