Letter to the Editor: Time to start asking around about venture capital investments | Letters

The Chamber of Commerce is entitled to an opinion (Coconino Voices, 10/6). But it is not entitled to its own facts. The piece, which is a word-for-word reprint of a disinformation piece circulating throughout the country with a local Chamber leader’s name slapped on, touts Bernie Sanders and Alexandria Ocasio Cortez, the GOP’s boogie men of the left, as sponsors of tax bills allegedly targeting “small business” by raising the tax rate on carried interest.

In fact, the bills cited in the piece are sponsored by Sen. Tammy Baldwin and Rep. Bill Pascrell, and AOC is not even a co-sponsor. (Interestingly, conservative Sen. Joe Manchin is.)

Furthermore, the Chamber’s characterization of this as a “small business investment tax” is designed to mislead the public, the vast majority of whom don’t know what “carried interest” is and who do not follow venture capital businesses that are the subject of this tax.

“Carried interest” is compensation received by a partner of a private equity or hedge fund and is based on a share of the fund’s profits. This compensation is in lieu of a regular salary, wage or bonus like most employees receive, and it exists for the sole purpose of allowing the executive receiving it to pay the lower capital gains tax rate instead of the ordinary income rate the rest of us pay on income we receive from our jobs. This loophole also allows these rich investment partners to avoid paying into Social Security and Medicare as most taxpayers earning salaries, wages and bonuses must.