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Startups are America’s job engine, so give workers tax credits

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Re: Startups are America’s job engine, so give workers tax credits

#21

Post by nostrademons »

mmgutz wrote: post #4

What differentiates a startup from a normal business? A standup desk?

"The ability to grow really fast." -- Paul Graham

More specifically, we normally think of startups as businesses where you can do the work once and then sell it multiple times, while in a normal small business or consulting shop, you have to do the work for each customer. There's a pretty big grey area - enterprise software companies often need a significant amount of customization for each customer, while with the sharing/gig economy, whether you can "do the work once and sell it multiple times" depends on whether you consider "the work" to be the service the customer is paying for or the service of connecting an independent contractor to potential customers. But it seems to work pretty well as a functional definition.

Re: Startups are America’s job engine, so give workers tax credits

#22

Post by ryandrake »

specialist wrote: post #7

Whereas $6000 is a nice (modest) incentive, the lack of universal health care is the greatest barrier to entrepreneurship. Especially for parents (and wannabe parents).

I wouldn't call it the greatest barrier, but it's probably at least top-three. Lack of access to capital and lack of societal safety net to mitigate failure risk would be my personal #1 and #2.

Re: Startups are America’s job engine, so give workers tax credits

#23

Post by BatFastard »

basseq wrote: post #10

This is just EITC expansion / very low "basic income". There's nothing about "for startups" here, except that "poor founders on ramen noodles would benefit". Note also that "start-up" in the original study means "firms [less than a year old]".

A year is not long enough. It is for trivial projects, but not for things which require more under the hood.

Re: Startups are America’s job engine, so give workers tax credits

#24

Post by jnordwick »

twoodfin wrote: post #9
specialist wrote: post #7

Whereas $6000 is a nice (modest) incentive, the lack of universal health care is the greatest barrier to entrepreneurship. Especially for parents (and wannabe parents).

If that were the greatest barrier, wouldn't nations with universal health care see higher rates of entrepreneurship? I don't have numbers, but at least anecdotally it doesn't seem to be the case. Is the U.K. startup culture particularly impressive?

Not necessarily. The US has a of other benefits over those countries often. You can't treat the decision as mostly all or nothing based on access to universal health Care.

Also, you had to look at the benefit of universal HC over the current system. Some people will still find a way to get insurance.

You can still argue without employer assisted heath insurance and more govt or private options we'd have more entrepreneurship, and many would probably agree.

Re: Startups are America’s job engine, so give workers tax credits

#25

Post by cmdrfred »

specialist wrote: post #16
twoodfin wrote: post #9

Earlier quoted context omitted.

If that were the greatest barrier, wouldn't nations with universal health care see higher rates of entrepreneurship? I don't have numbers, but at least anecdotally it doesn't seem to be the case. Is the U.K. startup culture particularly impressive?

I will concede there are multiple factors. Lack of access to capital, winner takes all (pro-corporate) Freedom Markets[tm] decimating competition, etc. New business (and therefor new job) creation in the USA has tanked. Especially in rural areas. However we got here, what is the fix?

>New business (and therefor new job) creation in the USA has tanked.

The unemployment rate is at a 9 year low and falling. What data do you base this assertion on?

Re: Startups are America’s job engine, so give workers tax credits

#26

Post by snarf21 »

cbhl wrote: post #6

Canada has a refundable tax credit that many startups take advantage of, known as SR&ED. https://en.wikipedia.org/wiki/Scientific_Research_and_Experi... The one caveat is that you have to spend money (and keep good books) in order to be eligible for the tax credit.

This is interesting but I've always thought we should do it in such a way where someone could take say $100K out of their 401K to start up a business. This money is sitting right now and doesn't help grow the economy.

The company would be eligible for tax credits if the company fails at a lower rate and spread across five years. So say you and a partner start a company and document the percentage of this money that is spent on taxable wages. The company fails and you apply for the "startup tax credit" for future earnings. You would be able to get a $10K deduction per year for five years on your federal taxes if you put this back into your 401K. This means that you get half your money back. Your deduction can't be higher than the federal tax you owe in any of these years.

You get to try starting a company with less risk. The government will likely get lots of taxes that may actually be in excess of the up to $50K they gave you in credits since this $100K is being spent and taxed and reallocated many times over. I don't have this idea fully fleshed out but that is the gist anyway.

Re: Startups are America’s job engine, so give workers tax credits

#27

Post by theli0nheart »

Retric wrote: post #13
twoodfin wrote: post #9

Earlier quoted context omitted.

If that were the greatest barrier, wouldn't nations with universal health care see higher rates of entrepreneurship? I don't have numbers, but at least anecdotally it doesn't seem to be the case. Is the U.K. startup culture particularly impressive?

#4 UK(7.4/1000) does have over 3x the rate of new bussness per person than the US (2.28 /1000) which ranks #32 and is mostly behind countries with a stronger social safety net. http://www.nationmaster.com/country-info/stats/Economy/New-b... Now, if you mean startups as a specific type of new and arguably lower risk business backed by VC money. That has more to do with VC funding than people willing to take risks.

You don't need to start a new business to be an entrepreneur. You can easily inherit, take over, or join an existing one, and you'd still need to deal with standard barriers, like health care coverage.

Re: Startups are America’s job engine, so give workers tax credits

#28

Post by jnordwick »

BatFastard wrote: post #20

For me the question is who CREATES jobs. Startups create jobs, big corporations acquire then shed jobs. As a multi-startup founder, I think the earned income tax credit is brilliant. That along with a universal healthcare system would allow millions of people to take a greater risk in creating new companies.

The EITC is awesome. It is well established from many policy organizations as the most effective anti poverty (for current AND future generations) program we have today. It was wildly popular in conservative circles even.

But somehow the success of it is never built on. It baffles me.

Re: Startups are America’s job engine, so give workers tax credits

#30

Post by shimon_e »

specialist wrote: post #7

Whereas $6000 is a nice (modest) incentive, the lack of universal health care is the greatest barrier to entrepreneurship. Especially for parents (and wannabe parents).

I know a lot of entrepreneurs who travel to a cheaper country to work on their startup. They still pay their taxes to uncle sam.
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