Key Takeaways
- • Senator Susan Collins withdrew a November 2017 amendment targeting a private equity tax break hours after introducing it, reversing her leverage position during Senate Republicans' race to pass the $1.5 trillion tax overhaul, according to emails obtained by ProPublica via FOIA lawsuit.
- • The private equity industry preserved its tax break in the final legislation after Collins' retreat, which Senate Republicans credited as a significant victory for Majority Leader Mitch McConnell and enabled her pivotal 51-49 vote for the bill.
- • Collins has since become the top Senate recipient of private equity campaign donations, receiving over $500,000 from the industry in her current reelection cycle, according to the Center for Responsive Politics.
- • The sequence of events—Collins' tax amendment proposal, rapid withdrawal, and subsequent substantial private equity funding—illustrates the intersection of legislative leverage, industry advocacy, and political financing in preserving the carried interest tax treatment favored by private equity and hedge fund managers.
Summary
In late November 2017, as Senate Republicans pushed toward passage of their $1.5 trillion tax overhaul with no Democratic support and wavering Republican votes, Senator Susan Collins of Maine occupied a pivotal swing position. Recognizing her leverage, Collins proposed an amendment the day before the vote designed to offset corporate and wealthy tax cuts by expanding the child care tax credit and targeting a tax break favored by the private equity industry.
However, Collins reversed course within 24 hours. According to emails obtained by ProPublica through a Freedom of Information Act lawsuit, a Republican Senate aide informed a Treasury Department official that Collins was "no longer offering her amendment" as the Senate voted on the bill. Her withdrawal represented a major tactical victory for Senate Majority Leader Mitch McConnell. Collins voted for the legislation, which passed 51-49 and slashed the corporate tax rate—one of the Trump administration's most significant legislative accomplishments.
The circumstances surrounding Collins' amendment reversal had remained unclear until ProPublica's reporting, which analyzed the rapid sequence of events and interviewed key participants. The private equity industry successfully preserved its tax treatment through her retreat, avoiding what would have been a material challenge to a tax provision central to the sector's economics.
Nearly three years later, the private equity industry has emerged as Collins' most reliable financial supporter heading into her reelection campaign. She has raised more than $500,000 from private equity donors in her current cycle—more than any other sitting senator, according to the Center for Responsive Politics, the nonpartisan campaign finance tracking organization. This concentration of industry funding among a single senator underscores the financial dynamics that followed her legislative decision in 2017, raising questions about the relationship between her tax policy reversal and subsequent fundraising activity within the alternative investment community.
However, Collins reversed course within 24 hours. According to emails obtained by ProPublica through a Freedom of Information Act lawsuit, a Republican Senate aide informed a Treasury Department official that Collins was "no longer offering her amendment" as the Senate voted on the bill. Her withdrawal represented a major tactical victory for Senate Majority Leader Mitch McConnell. Collins voted for the legislation, which passed 51-49 and slashed the corporate tax rate—one of the Trump administration's most significant legislative accomplishments.
The circumstances surrounding Collins' amendment reversal had remained unclear until ProPublica's reporting, which analyzed the rapid sequence of events and interviewed key participants. The private equity industry successfully preserved its tax treatment through her retreat, avoiding what would have been a material challenge to a tax provision central to the sector's economics.
Nearly three years later, the private equity industry has emerged as Collins' most reliable financial supporter heading into her reelection campaign. She has raised more than $500,000 from private equity donors in her current cycle—more than any other sitting senator, according to the Center for Responsive Politics, the nonpartisan campaign finance tracking organization. This concentration of industry funding among a single senator underscores the financial dynamics that followed her legislative decision in 2017, raising questions about the relationship between her tax policy reversal and subsequent fundraising activity within the alternative investment community.
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