The D.C. Council was back in session Wednesday, and an early measure to lower capital gains tax was voted down handily.
The D.C. Council today shot down Mayor Vincent Gray's proposal to lower the capital gains tax for residents who invest in D.C.-based tech firms.
Despite Gray's heavy lobbying for the measure, which he says will help grow D.C.'s tech sector by attracting angel investors, the council voted 11-1 to remove the tax cut from a larger piece of legislation. Instead, the issue will go before the D.C. tax commission for further study.
D.C. has an 8.95 percent capital gains tax rate. The proposal would have lowered it to 3 percent for investments in local tech start-ups. Advocates say that without it, investors will move to Virginia or Maryland when they want to cash out, because the rates are lower there.
Critics, including some on the council, have called the proposal an unfair tax break for the city's wealthiest residents, and say it's unlikely anyone would move just to save money on selling a stock.