Your views: Proposed tax rate increase will hurt start-ups
I remember a time in the not-too-distant past when hard-working Americans who achieved success in their lives were admired. They weren’t only admired for their personal accomplishments but also their contributions in making our nation’s economy the envy of the world that so many other countries sought to replicate.
Today, one of the ways in which these individuals have helped keep the American economy going—even in the midst of the slowest recovery since the Great Depression—is through investing private equity into start-up businesses that have created countless jobs. In Wisconsin alone, there are more than 300 private equity-backed businesses headquartered here that employ more than 118,000 workers.
However, continued private equity investments into our economy will be at risk under a proposal introduced by Congressman Dave Camp, R-Mich, chairman of the House Ways & Means Committee. He proposed increasing the tax rate on carried interest (investment income) from the capital gains rate that it’s been at for the last 100 years to the ordinary income rate. To me, this seems more like a punishment to those who have worked hard, achieved success and are now doing their best to help revive our nation’s stagnant economy by investing into promising businesses and creating new jobs.
Since the Great Recession, the limited growth we’ve seen with the American economy can be attributed to private equity and venture financing invested into companies ranging from old-line manufacturers to technology start-ups. This growth will cease under Congressman Camp’s proposed tax increase.