Donald Trump
Trump does the opposite of Sweden – wants to raise taxes for venture capitalists
Andreas Cervenka
Published 06.05
During his short time as president, Donald Trump has put forward one proposal after another that has been criticized for being extreme and violating all norms.
Now he is attacking the taxation of bonuses in the venture capital industry - and suddenly makes Sweden appear extreme.
After taking office, Donald Trump has surrounded himself with several of the world's richest men, and there are expectations in the business community that lower income taxes for the wealthy and a wave of deregulation will make it a harvest time for companies during his term in office.
Closing loophole
But as part of a tax package, Donald Trump now wants to close a loophole when it comes to taxes for venture capitalists, writes the Financial Times.
It concerns their profit sharing, so-called “carried interest”, which has so far been taxed as income from capital and thus much lower than ordinary wage income.
This has meant that the tax has been able to be as low as 20 percent compared to over 50 percent if the bonuses are classified as ordinary income and employer contributions are included.
Several venture capitalists are among the richest in the United States; Blackstone founder Stephen Schwarzman, for example, is worth just over SEK 550 billion.
The fact that these super-rich have been able to pay lower taxes in percentage terms than their secretaries has led to criticism for a long time and there have been several attempts to close the loophole, most recently during Joe Biden’s time as president. However, this has not been successful, partly after massive lobbying efforts from the venture capital industry.
But Donald Trump, who wanted to get rid of the venture capitalists’ cream of the crop back in 2017, now wants to move forward with the issue, he told a meeting with Republicans on Thursday, according to the FT.
Different direction than Sweden
The news was praised by a Democratic senator on X.
Therefore, Donald Trump is moving in a completely different direction than Sweden.
Some time ago, an investigator presented a proposal on the taxation of "carried interest" in Sweden. The investigation was appointed after venture capitalists fought the Swedish Tax Agency for over a decade and mostly lost.
The proposal followed the line of venture capital and means that, if it passes, profit sharing will be taxed to a greater extent as capital income instead of income from services.
The reduced tax revenue for the Swedish state, 600 million in the first year and 300 million per year thereafter, is proposed to be financed by increased taxes on snus and beer.
The proposal has been criticized for being a commissioned job and the political opposition called it "provocative" and "grotesque".
"It doesn't get better"
But critical views have also come from the business community.
Entrepreneur Gunilla von Platen said last fall in an interview with Svenska Dagbladet that venture capitalists' demands for lower taxes are damaging their reputation.
- It's not getting any better, you think they're greedy to an extreme level, said Gunilla von Platen.
She was supported by Daniel Wikberg, founder of the company Upsales.
"I'm normally not a big fan of the Swedish Tax Agency, but here I think it's crystal clear. That employees at venture capital companies who have taken 'zero' risk should be allowed to tax their bonuses as capital instead of income from work is absurd," he wrote on Linkedin, according to SvD.
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