The U.S. House of Representatives recently passed a bill to close the
carried interest "loophole" for private equity investors. Currently,
these investors pay capital gains tax rather than income tax on the
upside they receive if their investments do well. Most private equity
investors don't favor the new legislation, as it severely increases the
tax they will pay on their profits.
The legislation will affect
both buy-out investors and venture capitalists. (Many people, including
many in the press, misuse the term "private equity" to refer only to
buy-out investing, but strictly speaking, it applies to both.) Venture
capitalists buy minority positions in young companies they think will
grow quickly; buy-out investors buy most or all of companies they think
can be turned around by fixing a few basic things.
To read the full, original article click on this link: I Favor More Tax Breaks For VC Millionaires
Author: Jose Ferreira
