[varispeed]

The whole idea of venture capital comes from the broken taxation model. The people who actually produce things, you know doing the work and have knowledge how to do something are burdened with heavy taxation, because years ago, when companies had high headcount, it was a way to make companies pay taxes. Now that everything gets offshored, including work, that model doesn't work anymore, but politicians for known reasons (corruption) don't want to change that, so to plug the tax gap, they increase taxes on labour and continue the squeeze, while not touching the big companies and the rich. This has created a situation, where educated and hardworking people can't amass enough capital to start their own business and their only way to get their idea running is to beg venture capitalists for money in exchange for a slice of their business or banks for a loan.

This has created a divide and widens the inequality gap on a scale not seen before in our lifetimes.

The rich get extremely rich, because they don't pay the same taxes as labour and they have so much money they own politicians and can make sure the status quo never changes.

This has caused things like "quiet quitting", because people no longer see work is worth anything anymore if you can't progress your life in any meaningful way.

All ladders to wealth and fulfilment that our parents and grandparents had have been destroyed.

[ransom1538]

"so to plug the tax gap, they increase taxes on labour"

Agree here. If you ever want to ruin a fancy dinner party say this: "We should tax capital gains at the highest rates, and tax labour the lowest."

[jimnotgym]

This is a good comment. In the UK capital gains are taxed at around half the rate of employees. There are other incentives to 'investors' too. VCs and Hedge Funds are parasites on those that know how to produce wealth. They should pay more.

Or what is the alternative, if they didn't get their tax breaks they would do what? Stop wanting money? I don't think so

[youngtaff]

Yeh, Carried Interest is one of the biggest tax cons going

[erenyeager]

I don’t know, I like your reasoning but isn’t it more complicated than that? Bootstrapping imo is the best way to go if you don’t wanna give up stake but the reality is that going to VCs makes much of the process much easier (funding). Without the VC system, would we have to go back to a traditional loan process? I find that backwards and I would assume founders will like getting money from VCs better than banks at the start (after all, most loans may not even be approved if you’re starting out).

[lotsofpulp]

> because years ago, when companies had high headcount, it was a way to make companies pay taxes.

What does this mean? Assuming you are referring to earned income tax, I do not understand how income tax is a way to make companies pay tax.

[beiller]

I can take a stab. I imagine, if everything else stayed the same (rent, food etc) and the government raised income tax, companies would be forced to pay more wages to cover the gap. IE most of the increase would come out of the employer's pocket, because there is a minimum they ultimately must pay in wages in order for workers to afford rent food etc, and if the minimum is not met, why bother working?