US venture capitalists worry over tax threat
Alarm bells going off over tax proposals
A bill proposed by the US House of
Representatives in June that would sharply increase the tax rate for venture
capitalists has set alarm bells ringing.
It proposes that the 20% fee that VCs collect on their profits, which is
currently taxed at the capital gains rate of 15%, be taxed at the ordinary
income rate of up to 35%.
The higher tax would apply to venture capital, along with private equity and
hedge funds and similarly structured funds for real estate and oil and gas
investments.
Venture
capitalists have launched a lobbying campaign to convince lawmakers the bill
has the potential to dampen entrepreneurship, put the US at a competitive
disadvantage, and drive the brightest graduates a way from a business that
bootstraps risky start-ups and nurtures new technologies.
Further reading:
Insider Business Club: private equity