On Thursday, President Trump asked Republican legislators to end tax loss on the interests.
Tax relief allows managers of investment capital funds and venture capital funds to deal with their profits from investments at a lower capital gains rate, rather than an ordinary income.
The abolition of tax relief would be a great success for the venture capital industry.
“The interest in the origin encourages intelligent and high -risk investments in innovative high -growth innovative startups”, president and chief executive officer of the National Venture Capital Association (NVCA), Bobby Franklin said in a press release.
Trump launched the end of the escape from the interests carried when he campaigned for the president in 2016. However, when he assumed his functions for his first mandate, his elimination was not included in the Act on tax reductions and 2017 jobs. Rather, The tax code has been changedExtending the detention period so that assets are eligible for the rate of capital gains from one year to three years.
Given that venture capital companies rarely sell assets a year after having made an investment for the first time, this modification was perfectly satisfactory for industry.
“Trump’s tax law 2017 has maintained business investments that flow towards emerging technologies such as AI, crypto, life sciences and national defense. A change now disturbing this progress and harm in a disproportionate way, small investors, especially in average America, “said Franklin.
Despite the concerns of NVCA, the vast majority of capital invested in emerging technological companies come from New York and Silicon Valley, with northern California particularly dominant.
