At the inaugural Cornell Tech @ Bloomberg event, president of startup accelerator Y Combinator Sam Altman spoke about income inequality and the carried interest rule that allows funds to pay taxes on returns at the capital gains rate Bloomberg reports.
Sam Altman, the president of startup accelerator Y Combinator, says it’s “ridiculous” that venture capitalists pay a lower rate on their returns than households do on their income.
The carried interest rule allows managers of funds, including venture capital and private equity, to pay taxes on the returns they collect at the capital gains rate, which tops out at 20 percent -- for gains on assets held longer than one year -- or 23.8 percent with net investment income surtax included. The top rate for regular income is 39.6 percent.
“There’s no logical way that I can justify why the returns that we earn managing other people’s money should get capital gains treatment,” Altman said at a Cornell Tech event at Bloomberg’s New York headquarters late Monday.
Read the full article on Bloomberg.