$10.7B Private Credit Tax Break Under Fire in U.S. Senate 🚨
A controversial tax cut for private credit funds—initially included in the House version of a spending bill tied to Trump-era policy—has been removed from the Senate’s draft, sparking heated debate in Washington.
🧾 What’s at Stake?
The proposal would slash taxes on dividends from Business Development Companies (BDCs), costing an estimated $10.7 billion over nine years, per the Joint Committee on Taxation.
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❌ Senate Says No (For Now)
The Senate pulled the provision amid bipartisan concerns over fairness and fiscal responsibility.
Sen. Elizabeth Warren slammed the move:
> “Private credit companies don’t need a tax break — working people do.”
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⚠️ Broader Budget Worries
The CBO warns the full bill could add $2.4 trillion to the national debt by 2034, with minimal economic upside. Critics argue the cuts benefit the wealthy while threatening programs like SNAP and Medicaid.
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📊 Industry Reacts
Supporters say BDCs deserve tax parity with REITs (which got similar breaks in 2017).
In 2023, BDCs drew $44B in investments — a 70% jump from the previous year.
Advocates believe tax relief could unlock even more capital flow.
👥 A scaled-down version is being explored to reduce cost and attract broader political support.
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🔑 Key Points:
💸 $10.7B tax cut proposed for private credit via BDCs
🗣️ Critics say it favors the wealthy, hurts social programs
🏛️ Senate draft omits the tax break—for now
📉 Debate continues as final negotiations approach