Local Tech Wire

RESEARCH TRIANGLE PARK, N.C. – Saying that provisions in a bill creates a higher tax rate for venture capital job creators than for speculators in gold and oil derivatives,” the reacted angrily Friday to legislation passed by the House of Representatives.

In a strongly worded statement, the trade group that represents venture firms across the U.S., called on the Senate to “correct the problematic provision” in House bill 4213. That provision changes the way venture firms’ income is treated.

The bill passed 215-204 with 13 representatives not voting.

“Many alternatives that would have increased taxes on carried interest and raised revenue, but not to the draconian levels in H.R. 4213, were presented to House members,” the NVCA said. “Those alternatives remain viable options for the Senate.”

According to GovTrack, the

North Carolina:

• Yea, NC-1Butterfield, George [D]
• Yea, NC-2 Etheridge, Bob [D]
• Not Voting, NC-3 Jones, Walter [R]
• Yea, NC-4 Price, David [D]
• Nay, NC-5 Foxx, Virginia [R]
• Nay, NC-6 Coble, Howard [R]
• Nay, NC-7 McIntyre, Mike [D]
• Yea, NC-8 Kissell, Larry [D]
• Nay, NC-9 Myrick, Sue [R]
• Nay, NC-10 McHenry, Patrick [R]
• Not Voting, NC-11Shuler, Heath [D]
• Yea, NC-12 Watt, Melvin [D]
• Yea, NC-13 Miller, R. [D]

Georgia:

• Nay, GA-1 Kingston, Jack [R]
• Yea, GA-2 Bishop, Sanford [D]
• Nay, GA-3 Westmoreland, Lynn [R]
• Not Voting, GA-4 Johnson, Henry [D]
• Yea, GA-5 Lewis, John [D]
• Nay, GA-6 Price, Tom [R]
• Nay, GA-7 Linder, John [R]
• Yea, GA-8 Marshall, James [D]
• Nay, GA-10 Broun, Paul [R]
• Nay, GA-11 Gingrey, John [R]
• Yea, GA-12 Barrow, John [D]
• Yea, GA-13 Scott, David [D]

South Carolina:

• Nay, SC-1 Brown, Henry [R]
• Nay, SC-2 Wilson, Addison [R]
• Nay, SC-3 Barrett, James [R]
• Nay, SC-4 Inglis, Bob [R]
• Yea, SC-5 Spratt, John [D]
• Yea, SC-6 Clyburn, James [D]

NVCA president says bill will hurt job creation

The NVCA has lobbied strongly against the bill. Hundreds of VCs, including many in North Carolina and Georgia, recently signed a letter protesting the bill.

The bill “doubles the taxes on venture capitalists who work with start-up companies in order to pay for temporary, large corporate tax extensions,” the NVCA said. “Specifically, a provision in the bill changes the tax status of venture capital carried interest from capital gains to an ordinary income/capital gains blend, which effectively removes any meaningful tax incentive for long term investment in new companies. In fact, the proposal creates a higher tax rate for venture capital job creators than for speculators in gold and oil derivatives, sending confusing signals regarding which investment activities Congress believes should be encouraged during the country’s economic recovery.”

Mark Heesen, the NVCA’s president, said the bill if passed by the Senate would hurt job creation.

“The House of Representatives today failed to recognize the serious economic consequences of their actions,” Heesen said. “It is both ironic and disconcerting that legislators can profess commitment to creating jobs – and then discourage the type of long term investment which has been a proven job creator for the last century.

“We are one step closer to unraveling an economic model that has made America the global center of entrepreneurship and innovation,” he added.

“To those House members who consistently express interest in bringing more venture capital investment to their districts and states, I can tell you unequivocally that this is how NOT to attract investment.”

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