Private Equity Barons Defend Tax Breaks from the Shadows
By Dustin Duong
As lawmakers continue to crunch the budget on Capitol Hill, the private equity (PE) industry is trying to protect its coveted carried interest tax loophole, which rewards its extractive risk-taking and exploitation of workers, communities and the public. These Wall Street billionaires have long used their political power to push lawmakers to preserve this slice of the tax code, which allows them to evade paying their fair share and pad their already outsized profits.
This time, private equity firms are using a network of companies that they own, financially support, or are associated with to project an artificial image of homegrown resistance. In Texas and Louisiana, PE has enlisted oil and gas producers to fight its fight. And more widely across the country, they have brought in corporate landlords to do the same.
Private equity firms make investment decisions using other investors’ money, which they raise into funds to purchase businesses that they directly operate; these become the firms’ portfolio companies. The PE firm will then ruthlessly trim expenses (such as by firing staff and shutting down vital services, eventually lowering quality of service) before exiting the investment by taking the company public or selling it off.
Private equity charges its investors — including large institutions like public workers’ pensions funds — a share from the top of a fund’s investment returns, also known as carried interest or carry. For tax purposes, fund managers can treat this money, a personal bonus for managing other peoples’ money, as if it were profits from investing their own. Normally taxed at 37 percent, this trick brings the rate down to the 20-percent long-term capital gains rate. Analysis of SEC filings by Americans for Financial Reform and partners show that just eight top executives at two of the biggest private equity firms—Blackstone and KKR—dodged a collective $335 million in taxes from 2019 to 2023 thanks to the carried interest loophole.
As a result, private equity managers have spent years fighting to retain their tax break. Research shows that, on their own, PE firms have leveraged vast political power to affect political change in their favor. Often, they use their portfolio companies to lobby and conduct other political operations.
The fossil fuel industry front for PE
Private equity has used its deep ties to the fossil fuel industry to lobby in defense of the carried interest loophole.
On April 9, 2025, the Louisiana Oil & Gas Association (LOGA) sent a letter to House and Senate Republican leadership. Two days later, the private equity firm EnCap Investments and the Texas Independent Producers & Royalty Owners Association (TIPRO) addressed their own letters to four Texas Republicans. All three letters, written on behalf of the oil and gas industry, decried the possible loss of the carried interest loophole, alleging ending the tax dodge would negatively impact the U.S. energy sector. And all three pointed to private equity’s continued purchases in the sector in both states — the same type of spending that resulted in over a gigaton of carbon emissions worldwide in 2024 alone, according to analysis by the Private Equity Climate Risk project.
Over the past decade, private equity firms have spent $12 billion to take control of or conduct other business with Louisiana fossil fuel companies, according to LOGA President Mike Moncla.
Since 1988, EnCap has positioned itself as an energy specialist in the private equity sector, pumping billions of dollars into oil and gas extraction, pipeline and storage projects and, only recently, the energy transition. Private equity and its associates also count themselves among the members of both the LOGA and TIPRO trade associations. LOGA, founded in 1992, claims to “help the entire oil and gas industry in Louisiana.” And TIPRO, founded in 1946, suggests that it is “one of the country’s largest oil and gas trade associations.” All three organizations have spent several decades either directly profiting or boosting profit from fossil fuels, private equity interests in the midst of it all.
Of the 415 companies appearing on an archived membership directory of LOGA, at least 50 are associated with private equity: they are private equity-backed, provide services to private equity, make private equity investments, are co-investors on projects alongside private equity, do business with private equity, or are private equity firms themselves. This bloc of PE-related companies make up over 12 percent of the organization’s listed membership. Even so, the groups sent letters asking to protect the carried interest loophole on behalf of their entire organizations, looping in even companies that ostensibly have no ties to PE at all.
Altogether, the companies that are tied to PE spent over $82.5 million on political activity during the 2024 presidential cycle, funneling $35.6 million in contributions toward candidates and $46.8 million in direct lobbying. For example:
Cheniere Energy, Inc., the country’s largest producer of liquified natural gas (LNG), is backed by Brookfield and Blackstone, and is a member of LOGA. In the 2024 election cycle, the company made nearly $680,000 in contributions and spent $5.4 million on lobbying. The largest sum of these funds went to the Republican National Committee, followed by contributions to Rep. Mike Johnson (R-LA) and Rep. Wesley Hunt (R-TX).
Plains All American, a crude oil and natural gas company that operates a pipeline and other midstream infrastructure across North America, is an EnCap portfolio company and a member of LOGA. In the 2024 election cycle, the company made over $640,000 in contributions and spent over $800,000 in lobbying. Nearly half of the contributions went to the Americans for Prosperity Action, a libertarian PAC that, among other stances, advocates for more restrictive immigration controls.
Hilcorp Energy, a Houston-based energy company that partnered with the private equity firm Carlyle to acquire ConocoPhillips’ natural gas assets in the San Juan basin, is a member of LOGA. In the 2024 election cycle, Hilcorp made over $3.3 million in contributions and spent $480,000 on lobbying. The top recipients, to which the company gave between $100,000 and $625,000, were all conservative PACs, such as the Senate Leadership Fund (receiving $625,000) or the Ted Cruz (R-TX)-affiliated Truth & Courage PAC (receiving $125,000).
The real estate industry support’s PE’s flimsy arguments
Similarly to its activity in the fossil fuel industry, the private equity sector has used its relationships in the real estate industry to vie for carried interest.
On March 26, the National Multifamily Housing Council (NMHC), one of the leading trade associations drawing together the nation’s largest apartment landlords, led a letter to the House Committee on Ways and Means and the Senate Finance Committee. Joined by 16 other large, housing-related trade associations, including the National Apartment Association, National Association of Realtors, and the Real Estate Roundtable, the missive asked lawmakers to preserve the carried interest tax loophole, framing its removal as an “enormous tax hike.” The groups argued that protecting the provision, which lowers taxes on large private asset managers, would chill housing development and disincentivize homebuilding. In reality, the carried interest incentive is a much newer loophole long predated by the issues in housing construction.
Much like in the cases of TIPRO and LOGA, private equity is deeply embedded in the leadership structure of the NMHC, which boasts over 93,000 members who control more than 11 million apartments worldwide. The last archive of its leadership included numerous PE-backed landlords and PE firms themselves. For example:
The Blackstone Group, a private equity firm that manages over $1 trillion in assets worldwide, is on the NMHC’s Advisory Committee. Blackstone also backs companies that are themselves on the NMHC’s leadership boards, such as American Campus Communities (on the Executive Committee) and Entrata (on the Board of Directors). Blackstone is itself a landlord: it controls a company that operates single-family rentals, which has been accused of rent hikes, fee-gouging and disrepair. In the 2024 election cycle, Blackstone made over $48 million in contributions and spent over $8 million in lobbying.
RealPage, a technology company backed by private equity firm Thoma Bravo, is on the NMHC’s Board of Directors. Infamously, the Department of Justice and many state attorneys general have sued RealPage for facilitating price fixing among a cartel of the country’s largest corporate landlords, and is now the subject of several lawsuits and a Department of Justice investigation. In the 2024 election cycle, RealPage sent nearly one million dollars in contributions and spent $380,000 in lobbying, over half of which went to the Republican National Committee and the SFA Fund.
The carried interest loophole benefits PE most
The private equity industry has used its opaque and complex ownership structures to puppet several trade associations, which appear to speak for small business owners, to lobby in defense of the carried interest loophole. And Republicans in Congress seem ready to oblige: as Speaker Mike Johnson recently put it, “We’ve heard from interest groups around the country, and we want to do right by them.” The reality, however, is that such a niche, yet highly lucrative, corner of the tax code overwhelmingly benefits private equity managers. While private equity firms argue that maintaining the provision would benefit Main Street, what would actually benefit workers, communities and everyday investors is closing the carried interest loophole.