A compromise in Congress is forming among Democrats to tinker with the tax code, generate revenue by other means and apply those revenues to climate-change-related investments and deficit reduction. The Inflation Reduction Act of 2022, if it passes, would institute a minimum tax rate for large companies and close the carried interest loophole.
TechCrunch explored the climate-related provisions in the bill separately, giving us space to chat about proposed changes to carried interest, a tweak to our nation's tax law that could impact venture capitalists and other startup backers. The obvious question is whether the change will have a material impact on how capital is invested into startups; if the tax code change disfavors investors, it could limit investments into startups that were previously tax-advantaged.
So will it? Early public commentary from venture investors indicates that the change isn't that big of a deal. Let's talk about what's changing and what venture investors are saying — out loud, at least.