Candidate Trump vowed to close a key loophole for Wall Street bankers. But of course, Republicans refused to do so. And now they don't want to talk about it.
The Republican tax scam bill represents a laundry list of broken campaign promises from Donald Trump. Instead of “draining the swamp” of special interest connections, he has flooded it with more pariahs.
Chief among the empty reform promises Trump made was his campaign vow to do away with the luxurious, so-called carried interest tax loophole, which rewards a small number of private equity investors on Wall Street. They’re essentially able to hide huge portions of their earnings from the IRS by allowing them to pay taxes on most of their pay at a lower capital gains rate.
“Trump lands a blow against the carried interest loophole,” a New York Times headlined read in 2015.
“One thing I’d do is get rid of carried interest,” Trump announced during a presidential debate in 2016.
And on “Face the Nation” in May 2017, he was still pushing the same notion. “Carried interest was unfair, and it’s gone,” Trump declared.
Surprise! The final GOP tax bill does absolutely nothing like that.
But Republicans will do anything to avoid answering for this blatant discrepancy, including laughing the question off, flinging snide insults, and telling flat-out lies.
Pressed about the issue by Willie Geist on MSNBC’s “Morning Joe,” Texas Rep. Kevin Brady, who led the effort to write the House bill, lashed out at the questions and lied about who benefits from carried interest giveaways to Wall Street:
GEIST: Would you concede that this benefits primarily private equity firms like a lot of people in New York City?
BRADY: Oh gosh, I will tell you what, this is it? That’s the best question you’ve got on transformational tax reform….
GEIST: No, it’ one of many questions I have.
BRADY: ….is carried interest? Seriously?
GEIST: Wait, hold on. Chairman this was a primary campaign pledge. He went after it again and again on the stump. He talked about carried interest. You don’t think that’s important?
BRADY: You know what his primary campaign pledge was? Lower the tax rates, let people keep more of what they earn. Get our jobs going again. Get our paychecks increased again. President Trump and Congress is delivering on that big campaign promise today.
GEIST: Would you concede that carried interest — and we will move on to other parts of this bill — that benefits primarily a small group of private equity firms?
BRADY: I will concede that you are obsessed with one issue rather than the bigger picture.
GEIST: I’m not obsessed, sir. This is a promise the president made and something you expressed concern about just within the last month. Would you concede that it benefits the wealthy New York private equity firms?
BRADY: No, it doesn’t.
GEIST: It doesn’t?
BRZEZINSKI: It doesn’t?
BRADY: At the end of the day keep talking about this. This is why the American public turns off these shows, unfortunately —
BRZEZINSKI: Because they aren’t good answers.
BRADY: — because they’re not dealing with the real issues that Americans care about.
The idea that carried interest doesn’t benefit private equity firms is complete nonsense.
The facts are plain, as highlighted recently in The New York Times, which tabulated the GOP’s tax bill’s major “winners.”
“Investment managers who, thanks to the so-called carried interest loophole, pay taxes on the majority of their pay at a lower capital gains rates. But the purported reform to this tax provision will affect few if any private equity managers, leaving the loophole intact,” the Times noted.
As a candidate, Trump singled out a one specific, Wall Street-friendly tax loophole he vowed to close. But Republicans couldn’t, and wouldn’t, even do that.
And now they’re acting like it’s absurd to demand accountability from their party on what turned out to be a massive broken promise.