Tech Millionaires Fear Their Favorite Tax Break Will Be Chopped (1)

Silicon Valley woke up last week to a surprise: A tax break that lets the tech industry’s millionaires and billionaires shield their winnings from the Internal Revenue Service is being targeted by Democrats in Washington.

Once an obscure provision of the tax code, “qualified small business stock,” or QSBS, benefits venture capital-backed startups in technology and other industries that are aiming to get very big, very quickly. If these young companies go public or get acquired, holders of their QSBS pay no capital gains taxes on windfalls of $10 million or — in some cases — even more. And despite its name, the vast ...