VCs On Politics: Officials Who Say They Love Innovation Are Actually Suffocating It
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are well meaning, but it’s the directions they get from Congress. They are worried about getting put on the spot. Nobody asks, how many people did you save today by approving a drug, how many people can now get a drug for lymphoma. Patients will organize and wake up.”
This regulatory regime, and extremely litigious attitude toward anything that might happen in a clinical trial, has been a big reason why biotech and pharma companies are increasingly running their clinical trials—and taking the jobs that go with them—overseas.
Then there’s the debate in the other Washington about “carried interest,” which essentially would more than double taxes on venture firms. Marc Heesen, the president of the National Venture Capital Association, gave a nod to how he’s spent a lot of time fighting this idea in the nation’s capital. Nelsen noted that he spoke with British Columbia premier Gordon Campbell last week, who was happy to hear about the new tax increase, and is trying to take advantage of it to find ways to lure more of Arch’s capital north of the border.
“If there are policymakers in the audience, and you don’t think it matters, it does,” Nelsen says.
Then Nelsen really got worked up when talking about policies that are advancing at the state level. One is a new tax on research and development, which Nelsen said is “the looniest thing I’ve heard in a long time in a state based on an innovation economy.” Another is a new business and occupation (B&O) tax on investment firms, which “would cause all of them to leave the state the next day, including foundations,” if it became law. Nelsen wrote a guest editorial about this in Xconomy last week.
All of this was interesting to hear from Nelsen, who worked hard to campaign for President Obama in 2008, and was positioned up front near the stage in Chicago’s Grant Park on his historic election night victory. Obama’s team has been seeking input from venture capitalists, but Nelsen didn’t point to anything concrete that he said would help the industry.
“It’s amazing to me that people are thinking about taxing an innovation industry that’s at the core of our competitive advantage. If you create jobs in healthcare and cleantech and hold that stock for five or 10 years, you should be incentivized for it, and rewarded for it,” he said, his voice rising. “I’m not passionate about this,” he joked. The crowd applauded.