President Bush said he is against making venture capital and private equity firms pay income tax of 35 percent on their “carried” profits.
We wrote about why VCs and other investment professionals should be paying the higher tax than the 25 percent capital gains rate they currently pay — namely, they are already getting capital gains privileges on the personal money they are risking on these ventures.
We don’t entirely understand Bush’s logic on the matter, because his comments were expressed only vaguely, in reporting by the New York Times (see Bush’s comments lower down in this story, which is mainly about the stock market slide caused by sub-prime lending habits):
Noting that partnerships are a common structure among small businesses, Mr. Bush said he was satisfied with the current tax structure. “We are very, very hesitant about trying to target one aspect of limited partnerships,” he said, “for fear of it affecting small business growth.”