On Thursday, President Trump asked republican legislators to terminate tax breaks on the percentage transferred.
Tax attention allows managers for Equity and the Venture fund to treat their investment profits at a lower capital profit rate, and not as atypical income.
Removing a tax credit could be a great hit for the VC industry.
“The transferred interest encourages intelligent, high risk of investing in innovative high growth start-ups”, president and general director of the National Venture Capital (NVCA) Bobby Franklin he said in a statement.
Trump floated, ending the interest gap when he ran the president’s campaign in 2016. However, when he took the office for his first term, his elimination was not included in the Act on tax reductions in 2017 as an alternative of, The tax code has been modifiedExtending the period of maintenance of assets to qualify for capital profits from one to three years.
Because Venture Capital corporations rarely sell assets a 12 months after the first investment, this modification was perfectly satisfactory for the industry.
“Trump’s tax legislation in 2017 maintained the investments of undertakings that came to new technologies, such as AI, Crypto, Life Sciences and national defense. The change will now disturb this progress and disproportionately harm small investors, especially in Central America, “said Franklin.
Despite the fears of NVCA, the overwhelming majority of capital invested in rising technology corporations from New York and the Silicon Valley, and northern California remained particularly dominant.