WASHINGTON, DC – The National Venture Capital Association (NVCA) today issued the following statement after Democratic presidential candidate Hillary Clinton called for the elimination of the current tax treatment of carried interest during a speech in Detroit.
“In an election season driven by a strong undercurrent of populism, it’s unfortunate to see Hillary Clinton take this misguided position based more on politics of the moment than on sound economic policy. Changing the tax treatment of carried interest for venture capitalists runs counter to other parts of her own economic plan as well as the urgings of many economists who argue that America should encourage long term investment, not stifle it,” said Bobby Franklin, President and CEO of NVCA. “Carried interest is the incentive that creates and drives venture capital investment in America. Doubling the tax rate on carried interest earned by venture capitalists will only serve to discourage risky long-term investment into startups, creating a roadblock to innovation and disrupting one of the key drivers of our economic success. We agree with Secretary Clinton that America needs more entrepreneurial activity. So instead of trying to raise taxes on new company creation, let’s discuss ways we can use tax policy to build more American companies.”