Last session, there was a vigorous debate at the Capitol regarding HB 2011, legislation that would have greatly expanded the venture capital tax credit program in Arizona. Proponents for the “Shark Tank” tax credit claimed that the credits were needed because of a lack of access to venture capital funds in Arizona.
The Club has argued for years that this is not true and that venture capital is available for good ideas. Now after some investigation into the subject, the Phoenix Business Journal has reached the same conclusion. Namely, the problem is not a lack of funding, but rather a perceived lack of good opportunities for investment. Providing tax credits doesn’t solve this problem, it only creates a new one by picking winners and losers among entrepreneurs and investors.