Outgoing D.C. Mayor Vincent Gray gave the city’s tech scene some love as one of his final acts, signing a somewhat controversial tax cut into law. The capital gains tax on returns from investments in certain tech companies was lowered to 3 percent.
Here are a few thoughts on the cut from techs I spoke with:
Adam Zuckerman, Fosterly founder: “It’s a symbol and an indicator that the city is taking this very, very seriously,” referring to the city’s relationship with the tech sector. “Not many investors, especially at the angel level, are going to back away from a deal based on [the previous capital gains tax rate].” He said that overall it’s about “the bigger picture,” not just the direct, material impact of lowering the tax rate.
Valerie Gaydos, angel investor: “It has greater PR value than anything … it’s funny that the city council thinks it’s such a big deal, because it’s not a huge amount of money, it’s only a city tax.”
The D.C. Council originally voted down the tax break in 2012, largely because it was seen as a handout to wealthy investors in a city with a poverty rate of 20 percent. But much has changed since 2012, and the sector is growing more integral to the city’s identity by the day. Mayor-elect Muriel Bowser, who will be sworn in Jan. 2, was quick to reach out to the sector, although nothing specific is on the table.
Both Gaydos and Zuckerman, however, were generally optimistic about the city’s involvement in the tech scene. Zuckerman told me that “based on the conversations I’ve had, I’m nothing but optimistic for the city,” and that Bowser “is surrounding herself” with people that understand the sector very well.
