Why Hillary Clinton Support For Raising VC Taxes Is A Dumb Move
I don't often take political stands here. As a matter of fact, if you were to follow my writings around the Web, you might conclude that I fall in with the liberal, "never met a tax he didn't like" crowd.
But I am going to go off message here and rant a bit about tax legislation up in the U.S. Congress that would eliminate current tax schedules that allow venture capitalists to be charged 15 percent of their profits, rather than 35 percent.
"Don't get me wrong," Sen. Hillary Clinton (D-NY) told the New York Times yesterday. "Private equity and venture capital play important roles in our economy, and we should continue to support the entrepreneurial spirit that makes America great. "We can close this loophole that unfairly benefits some of the best-paid people in America, while continuing to encourage investment in innovative, young companies."
VC's argue that well, they put their money at risk helping high-tech (and other) companies through a growing period that will result in added jobs and a healthier economy.
And you know what? They're right. I've worked for many VC-backed companies and do so now. They do take risks, and should be acknowledged for it in the tax code.
I am sorry, but I don't think Hillary Clinton would know what to do with a VC-backed tech startup except to hit them up for campaign funds. I guess what we have here is a political calculus that in appealing to her largely public sector, non-VC-comprehending base, Sen. Clinton will raise more campaign funds than she would be able to generate if she stayed in with the VCs.
Another part of her political calculus: California is so Democratic-leaning anyway, she doesn't need Silicon Valley VCs and entrepreneurs to help her carry the state. I mean, who are 20 VCs in the Valley when you have the support of public sector unions with hundreds of thousands of members?
I sense that you focused-tested this stance. Still, this is a dumb move, Hillary. While many VCs are socially liberal as you are, you don't want to pick a fight with the VCs.
They can raise lots of money real fast. And not necessarily for you, but for your opponents.
Related Tags: support, companies, venture
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