Trump’s Plan to Eliminate Carried Interest Would Threaten Entrepreneurial Ecosystem

WASHINGTON, DC – The National Venture Capital Association (NVCA) today issued the following statement after Republican presidential candidate Donald Trump gave a speech in Detroit calling for the elimination of the current tax treatment of carried interest.

“Donald Trump’s call for the elimination of carried interest demonstrates an unfortunate misunderstanding of the critical role it has played in the growth of the U.S. entrepreneurial ecosystem.  Despite the populist uproar, carried interest has been an important feature of the tax code that properly aligns the long-term interests of investors and entrepreneurs to build great companies together, and is only realized after our country receives the benefit of greater economic activity,” said Bobby Franklin, President and CEO of NVCA.  “Far from being a so-called ‘loophole,’ the carried interest venture investors receive is similar to stock awards received by the founders of a startup in that both the venture investors and founders commit the time, energy and creativity against huge risks to build new startups into successful companies.  Rather than continue to toss around the proverbial political football to raise taxes on new company creation, let’s instead discuss ways we can encourage entrepreneurship and innovation by rewriting rules in the code which hurt or ignore startups. ”