steve schwarzman trump

  • A new amendment in the Republican tax bill would allow publicly traded partnerships to take the pass-through business deduction.
  • Many large private-equity firms, like Blackstone, are set up as publicly traded partnerships.
  • The change would give the owners of these multi-billion-dollar firms a large tax break Republicans say is designed for small businesses.

A proposed provision that could be included in the final Senate Republican tax bill would serve as a huge boon to large private equity companies.

An amendment introduced by Sen. John Cornyn, the second-ranking Republican in the Senate, would allow owners of publicly traded partnerships (PTPs) to take deduction for pass-through businesses on their income. That deduction was increased to 23% in the latest version of the Senate Tax Cuts and Jobs Act. 

Republicans have touted the pass-through provision, which allows companies in which the owner takes business profits as income, as a way to boost small businesses. Most large private equity firms like Blackstone and Carlyle Group are classified as PTPs.

According to Victor Fleischer, a tax law professor at the University of San Diego, the proposed change would allow executives at large financial services firms to take advantage of the deduction as well, bringing down their tax liability on fees from trading.

To clarify – that means Schwarzman, Rubenstein etc. KEEP 20% rate on carried interest AND get new 23% deduction on management fees & other income streams,” Fleischer, a columnist for The New York Times’ DealBook, tweeted on Friday.

Sen. Claire McCaskill, a Democrat, tweeted a photo of a list of amendments that were set be added the final version of the tax bill. It included the PTP provision.

Steve Schwarzman, the CEO of Blackstone, was an adviser to President Donald Trump and helped lead his council of business executives. The council was disbanded earlier this year after Trump’s response to the violence in Charlottesville, Virginia.

The Senate is expected to vote on the Tax Cut and Jobs Act later on Friday. It is expected to pass.

A spokesperson for Cornyn did not immediately respond to a request for comment.

SEE ALSO: We know more details about the final GOP tax bill — thanks to a lobbyist who sent it to a top Democratic senator

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