VCs Seek Exemption To Changes In Tax On Carried Interest

Now, the venture capital community is going to Capitol Hill seeking an exemption, arguing they are crucial to America’s entrepreneurial spirit. V.C.’s, after all, helped finance companies like Cisco and Google. They are long-term investors who often hold investments for more than a decade, they say.

The National Venture Capital Association has said in position papers that “eliminating the capital gains incentive for venture investing would discourage long-term, high-risk investment and that the consequences would be extremely harmful to U.S. economic growth.” At one point, Magic Johnson, the former basketball star and entrepreneur, joined the fight, arguing that changing the tax would hurt investments made in minority communities.