As Bush-Era Tax Cuts Expire, VCs Nearly Split On Impact
As Congress debates whether or not to extend Bush-era tax cuts for some of the country’s wealthiest people, many in the financial community have said the cuts should be left in place, as the benefits will trickle down to the broader economy.
But venture capitalists surveyed by law firm DLA Piper LLC are nearly split on whether letting the tax cuts expire would have an effect on the technology sector, or their firms’ pace of investments in tech companies.
According to the survey to be released today at the Global Technology Leaders Summit, 55 percent of venture investors came out against letting the long-term capital gains rates, currently at 15 percent, increase to 20 percent in 2011 at the sunset of a series of Bush-era tax cuts. They believe the expiration would result in reducing investments in start-up tech companies.
Peter Astiz, a global co-head of the firm’s technology sector, said he was surprised that percentage wasn’t higher, though.
“You’d think from reading all the blogs that everyone [in the investment community] is up in arms about this,” Astiz said. “The response was very muted. Forty-five percent of respondents said it would have no impact on investment.”
