Democrats formally propose higher tax on VCs, others
U.S. Congressman Sandy Levin (D-Michigan) has finally introduced the bill that venture capitalists were dreading: A higher tax on their profits.
If it passes, and there’s a possibility it may, it will change the tax treatment of “carried interest,” or profit that VCs and other investment professionals get from their investments. The change would tax that profit at a much higher rate — by treating it as ordinary income, rather than as capital gains, which draws a mere 15 percent tax rate.
Here’s Levin’s statement. The jargon can be tough for the uninitiated. Basically, the legislation would apply to any investment professional active in “alternative investments,” which refers to most forms of investment outside of stocks and bonds.
Here’s a PDF of the proposal.
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About the Author, Matt Marshall
Matt launched VentureBeat in September of 2006, with the realization that no one else was covering the entrepreneurial and tech innovation scene with the velocity or depth that he was. Prior to founding VentureBeat, he covered venture capital for the San Jose Mercury News from 2001 to 2006. In 2002, Matt was awarded "Journalist of the Year" by the Northern California Society of Professional Journalists. Prior to working at the Merc, he was a correspondent for the Wall Street Journal in Bonn, Germany from 1995 to 1998, and a writer for the Washington Post in 1994. Matt holds a PhD in Government and an MA in German and European Studies from Georgetown University. In addition to VentureBeat, Matt is also the Executive Producer of DEMO, the leading launchpad event for emerging technologies.
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