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
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.