I can relate to many of the points he makes about venture capitalists creating jobs, and the economic impact in areas where portfolio companies reside. In the turnaround business, we see similar characteristics. We save jobs. Thousands of them, every year. In some cases where our client companies have been located in very rural areas, the local economy would have been devastated were in not for our efforts.
The Carried Interest taxation debate carries on. The fact that people who've rarely held real jobs (politicians) are considering raising the tax burden on those firms who drive a good deal of our economic engine here in the U.S. is ludicrous. This is a great example of the unproductive sapping the life out of those who are productive in our society. Taking from those who produce economic activity to support those who don't, is a great way to watch a country slip into a state of economic and social disaster.
The point is, that if the taxes on carried interest are increased, those Private Equity and Venture Capital fund managers will have even less incentive to take on the risk required to do what they do. Many will just keep on plugging away at their current fund until it is completely deployed. Then, they'll find something else to do that doesn't penalize them for what they do to earn a living.
Private Equity and Venture Capital funds are the pinnacle of a capitalist society. Capitalism works time and time again. If you take away the incentives of a capitalist society, no one is working for their own benefit anymore, but for others. When this happens, the economic wheel will stop turning slowly, until it has stopped all together. This is the effect by raising the tax burden on our nation's risk takers. It appears that the out of touch politicians in Washington, would rather all of us be dependent on a government that doesn't produce any good or service. No, they want to suck the life out of our independence, little by little, until we are dead to achievement.
I'm calling my congressional representatives. Join me.
