Mullins: Protect the investments powering our economy

Published 10:59 pm Tuesday, May 6, 2025

Small business owners need more than just a good idea to succeed. They need capital to hire employees, expand into new markets and upgrade their equipment or infrastructure. For many small businesses, that funding comes from long-term, private capital investments.

Home to more than 3 million small businesses, Texas — and especially East Texas — is known for its entrepreneurial spirit. Fittingly, our state is also one of the nation’s top locations for private-equity investment, with more than 730 investments in 2024, totaling over $73 billion.

Since 2020, more than $230 billion in private investment has helped to expand domestic energy production and secure key resources. These are boots-on-the-ground investments in America’s future. On top of that, nearly 1,000 manufacturers receive private equity investment each year to modernize equipment, boost production and reshore supply chains.

Beyond manufacturing and production, these investments strengthen the foundation business owners have built by driving growth, creating more jobs and continuing to innovate in critical industries that drive our local economy. Private equity and private equity-backed companies support 1.2 million jobs in Texas. On average, these workers earn more than $10,000 above the national average. These investments are literally building the companies, products, and technologies that keep America competitive.

Our current tax policy rewards investors who are betting on American ingenuity and willing to take risks to find opportunity. The current tax treatment of carried interest ensures investment reaches parts of the country, and parts of the economy, where other capital may not go. But right now, Congress is considering changing this policy by debating increasing taxes on carried interest.

It’s easy to get lost in the jargon, but this issue is about more than tax policy — it’s about whether the U.S. will continue to lead in attracting investment and driving innovation to ensure our economic competitiveness. Hiking the tax on carried interest would increase the effective rate from 23.8% to 40.8%, pushing the U.S. behind countries like China, Germany, and the UK. America cannot lead by disincentivizing investment. We lead by welcoming it.

The tax debate in Washington gives us a chance to recommit to the policies, like the Tax Cuts and Jobs Act (TCJA), that are working — the ones that bring investment to the places and industries that drive our future.

TCJA unleashed more long-term capital investment that supports jobs, workers, small businesses and local communities across the country. Since the law was passed in 2017, private equity has invested more than $5.6 trillion into the American economy, backing more than 39,000 small businesses that are the engine of local economies.

Raising taxes on carried interest would send the wrong message at the wrong time. Other countries are aggressively courting capital. If we make long-term investment harder here, it will go elsewhere.

Let’s use this moment to double down on what’s working — for workers, for business owners, and for our communities that rely on continued investment to thrive. Preserving the tax treatment of carried interest will help ensure America remains the best place in the world to invest, build, and grow.