Watchdog Slams Proposal Targeting Private Equity

FOR IMMEDIATE RELEASE

Contact: Mazie Goodlett (803) 369-2181

WASHINGTON, D.C. – Today, the Taxpayers Protection Alliance (TPA) slammed the Stop Wall Street Looting Act, reintroduced by Sen. Elizabeth Warren (D-Mass.) along with 15 other members of Congress. The proposed legislation is designed to increase legal liability for private equity (PE) firms when acquiring and managing portfolio companies. Key provisions of the bill include holding private investment firms, general partners, and insiders financially responsible for the debts, legal judgments, and pension obligations of the companies under their control, while ending certain tax deductions on corporate debt and increasing taxes on carried interest. The legislation would also limit dividend recapitalizations and monitoring fees, eliminate PE liability immunities under federal law (including the WARN Act), and prohibit federal health program payments to certain health care entities that sell assets to, or use assets as collateral for loans from, Real Estate Investment Trusts.

TPA President David Williams issued the following statement:

“Sen. Warren’s reintroduction of the misnamed ‘Stop Wall Street Looting Act’ is a reckless top-down attempt to clamp down on pro-growth investments and bury American businesses in reams of red tape. By forcing general partners to take on absolute liability for portfolio company debt and effectively outlawing standard investment practices like sale-leasebacks, this bill does not ‘protect’ workers or consumers—it systematically starves businesses of the capital they need to innovate, grow, and navigate turnarounds. Stripping away key investment strategies will only leave struggling enterprises with fewer rescue options, accelerating bankruptcy rates and destroying the very jobs politicians claim they are trying to protect. With affordability and business survivability at the top of everybody’s consciousness, it makes no sense to drown businesses in a sea of red tape.

“Millions of Americans will pay the price if this assault on investment and private enterprise becomes law. Regulators and lawmakers should focus on curbing unchecked government spending and reducing out-of-control regulations that crush businesses and raise prices on consumers, rather than punishing private investment for stepping in where traditional financing falls short. Congress must reject this anti-growth legislation and defend the free-market mechanisms that drive innovation and create jobs and opportunities across the country.”

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The Taxpayers Protection Alliance (TPA) is a non-profit, non-partisan organization dedicated to educating the public through the research, analysis, and dissemination of information on the government’s impact on the economy.