# Carta Policy: Weekly Brief for July 29 **Author:** The Carta Policy Team **Read time:** 10 minutes **Published date:** July 28, 2022 Major breakthrough on tax and climate package. Proposed bill includes tax hike on carried interest, but QSBS and IRA private investment spared. ## The Topline - Sen. Manchin surprises everyone, pivots on prior opposition to climate spending and tax bill - Manchin/Schumer agreement to limit carried interest tax advantage, with significant implications for private equity and venture capital - House passes modified DEAL Act, which could expand qualifying investments for venture capital funds - FTC sues Meta to block merger, while antitrust legislation addressing Big Tech lacks necessary support to move forward ## Macro matters ### Tax deal curtails carried interest, maintains QSBS Senate Majority Leader Chuck Schumer and Senator Joe Manchin shocked the policy world Wednesday night by announcing a tax deal, [the Inflation Reduction Act of 2022](https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_one_page_summary.pdf). The bill would: - Invest $433 billion in: - Energy and climate tax credits - Affordable Care Act extensions - Raise revenues by $739 billion through: - 15% corporate minimum tax - Prescription drug pricing reform - IRS tax enforcement - Carried interest limitation - Reduce the deficit by $306 billion ### QSBS and IRA private asset investment both remain intact—for now The proposed legislation does not affect _qualified small business stock_ tax treatment or restrict the ability of _IRAs to invest in private assets_. Carta [worked](/content/policy/coalition-qsbs-exclusion/index.html) with coalition partners over the last year on both of these issues and is pleased to report that our coalition efforts were successful. _Next steps & politics_: Leader Schumer plans to put the bill on the Senate floor next week. ### Economic outlook The U.S. economy contracted for the second straight quarter as growth fell at a 0.9% annual rate during Q2. The IMF cut its [global growth](https://www.imf.org/en/Publications/WEO/Issues/2022/07/26/world-economic-outlook-update-july-2022) forecast by 0.4%, projecting it will fall from 6.1% last year to 3.2% in 2022. ### Carta & pay transparency On Nov. 1, New York City will require employers to publish wage ranges for open roles. To help companies prepare, Carta released complete sets of [NYC salary and equity bands](/content/data/average-salary-bands-in-nyc/index.html) for a few key job areas. ## Capital markets ### House passes DEAL Act to expand VC secondary investments This week, the House unanimously passed the [Developing and Empowering our Aspiring Leaders (DEAL) Act](https://docs.house.gov/billsthisweek/20220725/BILLS-117hr4227-SUSv1.pdf), which would ask the SEC to allow investments in qualifying portfolio companies acquired through secondary transactions to be considered “qualifying investments” under the venture capital fund rules. ### SEC advisory committee to meet to discuss liquidity challenges for small business investors Next week, the SEC’s [Small Business Capital Formation Advisory Committee](https://www.sec.gov/sbcfac-agenda-080222?auHash=5YfssntQjFsv8-ZGWLHkjj7uy_zWG3pB5bJOjRPsvO4) will meet to discuss liquidity challenges investors in small and emerging businesses are facing. ### SEC launches educational resources to help navigate capital raising process The SEC launched its [Small Business Capital Raising Hub](https://www.sec.gov/education/capitalraising), which centralizes resources designed to help small businesses and their investors navigate the capital raising regulatory framework. ## Crypto & digital Assets ### No agreement on stablecoin framework, though negotiations continue House Financial Services Committee Chairwoman Maxine Waters and Ranking Member Patrick McHenry were [unable to come to an agreement](https://financialservices.house.gov/news/email/show.aspx?ID=KGAZWKE5P2SV3YMYRSD3RVJZN4) on a [highly anticipated bill](/content/policy/policy-weekly-07-22-22/index.html) that would provide a regulatory framework for stablecoins before the Committee markup this week. ### Congress continues its scrutiny on SEC enforcement-first approach to regulating digital assets Sen. Pat Toomey criticized the SEC’s approach to regulating digital assets through enforcement instead of providing regulatory clarity. ## Banking and financial products ### Chopra focussed on BNPL, consumer data, and Section 1033 Consumer Financial Protection Bureau Director Rohit Chopra is pushing forward on an agenda that targets Big Tech’s expansion into financial services. ### OCC reviewing fintech’s impact The Office of the Comptroller of the Currency is [calling](https://www.occ.gov/news-issuances/news-releases/2022/nr-occ-2022-91.html) for new research on how fintechs are impacting the banking industry. ### Taxation ### Proposed change for carried interest tax Included in the Inflation Reduction Act is a revived proposal to narrow the advantageous tax treatment for carried interest. ## Antitrust, privacy, and technology ### Antitrust bill lacks necessary votes Senate Majority Leader Schumer has indicated that the [American Choice and Innovation Act](https://www.congress.gov/bill/117th-congress/senate-bill/2992/text) has stalled. ### DoJ partners with NLRB to protect workers In a memorandum of understanding, the Justice Department’s antitrust department [announced](https://www.justice.gov/opa/pr/justice-department-and-national-labor-relations-board-announce-partnership-protect-workers) a partnership with the National Labor Relations Board. ### FTC sues Meta to block acquisition of VR fitness app In a 3-2 vote along party lines, the Federal Trade Commission voted to [sue](https://www.ftc.gov/news-events/news/press-releases/2022/07/ftc-seeks-block-virtual-reality-giant-metas-acquisition-popular-app-creator-within) Meta to block it from acquiring virtual-reality company Within Unlimited.