On Thursday, President Trump asked the Republican legislators to finish tax exemptions with involved interests.
The tax exemption allows private capital fund managers and risk funds to treat their earnings at a lower capital gain rate, rather than ordinary income.
The elimination of tax exemption would be a great success for the VC industry.
“The interest entails intelligent and high -risk investments in innovative new high growth companies”, president and CEO of the National Association of Ventilation Capital (NVCA) Bobby Franklin said in a statement.
Trump floated ending with the escape of interest when he campaigned for president in 2016. However, when he assumed the position for his first mandate, his elimination was not included in the 2017 tax cuts and employment jobs. Instead, instead, instead, instead, The Tax Code was modifiedextending the tenure period for assets to qualify for the capital gain rate from a year to three years.
Since risk capital companies rarely sell active one year after making an investment, that modification was perfectly satisfactory for the industry.
“Trump 2017 fiscal legislation maintained the risk investment that flowed to emerging technologies such as AI, cryptography, life sciences and national defense. A change will now interrupt that progress and disproportionately damage small investors, especially in Central America, ”Franklin said.
Despite the concerns of the NVCA, the vast majority of the capital invested in emerging technology companies comes from New York and Silicon Valley, with the northern California remaining particularly dominant.