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Victor Hoskins will have you know that D.C. is hip.
“D.C. is a hip city,” the deputy mayor for planning and economic development told a gathering of tech entrepreneurs at a DC Week 2012 panel yesterday. “I’ve been stunned at how excited my son and daughter are that I live in D.C.”
He continued, “Everyone in this room looks hip but me,” adding that he recently upped his hipness quotient by attending a Coldplay concert.
And why’s it matter? Because, Hoskins says, D.C.’s attractiveness as a place to live is the key to bringing a bigger, better tech sector to the city.
That, and massive tax breaks.
In July, Mayor Vince Gray signed a $32.5 million tax incentive package for LivingSocial in order to keep the company’s 950 D.C. employees in town. Then, just last week, he signed another tech incentives bill, expanding the city’s tech zone to provide incentives to businesses anywhere in the District and providing five-year corporate income tax abatements for startups from the time they become profitable.
But still, his administration is mourning the one that got away: a proposal to cut in a third the capital gains tax paid by local angel investors who invest in D.C. tech companies.
“One item that we weren’t able to do was the capital gains reduction,” Hoskins lamented. “We are going to work on the capital gains issue, because it’s very important to the investment community. … We don’t want them to leave when they get wealthy.”
David Zipper, who leads Hoskins’ business development team, emphasized the increasing importance of angel investors as venture capital plays a diminished role.
“As the cost of starting a company has fallen,” Zipper said of cities like New York and London, “you’re seeing venture capital becoming less important.”
But Zipper says the D.C. region has to play catchup in this area. “We happen to be one of the wealthiest regions in the country—-actually, I think we’re the wealthiest,” he said. “We don’t have one of the most robust angel communities.”
That’s why he thinks the capital gains bill, which would lower angel investors’ capital gains taxes from 9 percent to 3 percent, is so important. As for the D.C. Council’s skepticism of the bill, he chalks it up to a lack of understanding.
“The Council, I don’t think they understood it,” Zipper said, noting later, “I’ve had very senior officials ask me what an angel investor is.”
But the bill’s not dead yet: Zipper says we can expect it to resurface in a few months.
Photo courtesy of dc.gov