

The VC Carried Interest Debate - MediaSquirrel
http://www.metamorphblog.com/2010/06/the-vc-carriedinterest-tax-debate.html

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hga
I'm seriously unimpressed, the author's analysis is based entirely on wishful
thinking, e.g. VCs "should pay their taxes just like everyone else".

Whatever makes him think VCs are going to take permanent cut in their income
without reacting in one or more ways to mitigate it?

You can change the rules in the middle of the game, but to expect only one
player to ignore that to his detriment is delusional.

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royrod
This is a slightly tricky one because I do think there is potential for the
tax change to negatively impact funding available for startups.

However, the impact should be minimal and I agree with Fred Wilson that
carried interest fees are not really that fundamentally different from other
types of fees and thus standard income tax levels make sense.

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hga
_A_ potential???

If you want less of something, or don't care if you get less of it, you tax
it.

Totally ignoring the fairness issue (it's certainly a debatable point),
starting from this status quo how can you possibly believe this change will
not cause harm?

About the only way I see for the medium to long term is that VC firms
restructure, which _might_ end up with a neutral or even better situation
(Fred Wilson is hoping for the latter, but I didn't find his case very
convincing).

But in the short term it's hard to see how it's going to be anything other
than a mess not to mention a distraction from the real job.

