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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

#61

Earlier quoted context omitted.

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?

Jobs weren't created in the "right" places and people don't think they should have to migrate for job opportunities. This has not always been a realistic expectation, tons of people have people have moved to find work in the past and now.

Ironically the same people who feel this way seem to dislike immigrants, who are motivated to take risks and move for a shot at a better life.

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

#62
post #49
post #26

Earlier quoted context omitted.

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 i…

In my mind, the simplest way to lower the risk is to just hand people the money they need to meet their needs (rent, electricity, food, internet). So maybe SR&ED could go away altogether if the UBI experiments are successful. If you consider those who drop out of college to do a startup, those people wouldn't even have $100k in a 401k to take out to start the business.

I agree that UBI could play a similar role if we can figure it out which still seems really hard at scale. I think for the dropouts they usually have a different path of living at home with all their needs met. Definitely an interesting topic to thing about. :)

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

#63
This is a bad title.

This article is not proposing a tax credit for startup workers at all. It's proposing a tax credit for everyone. It tries to make the case that this would be good for startup companies. But the proposed tax credit is NOT confined to workers at startups, at least that's the way the article reads. It says so right in the first paragraph: "a giant negative income tax for the average American." Average Americans do not work at startups.

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

#64

Instead of this tax credit for the already-middle-class, why not raise the standard of living in poor areas by investing in education, food security, health care and jobs in those areas? If it works, you raise the poor up to the middle class, reduce dependence on government subsidies, and grow the economy. Let's say you start a business in a poor neighborhood. If you hire locals you're by default investing in the loc…

How do you decide which neighborhoods qualify, and which don't? Just offering a tax credit isn't going to convince many people to start a business in a poor neighborhood anyway; usually, people avoid them because they don't want to work in a poor neighborhood every day, and because they worry about their safety. So are you going to have the government create businesses there?

Also, what about poor rural people? It doesn't make any sense to start businesses there, because the population density is too low (and again, how do you convince people to start businesses in economically unviable areas?). The ruralites need to move to where the jobs are, but they don't want to do that.

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

#65
post #2

I still think $6000 is a large amount in some sense for someone just getting started. I would much rather see this along with a flat tax. The recent discussion on here about USFacts.org highlighted that revenue was growing in proportion to population. What someone had said is that it makes the case for a much simpler tax system. We spend 6 billion man hours a year on taxes in the US. Is that really the best use of ou…

Flat tax is a horrible libertarian idea that simply hurts lower-income people, because to get the same revenue you end up having to massively raise the taxes on the lower classes, which they can't afford since they're already struggling to make ends meet. We've had progressive taxation in this country since the invention of income tax, for good reason. If you want simpler taxes, you don't need a flat tax, you just need to eliminate all the deductions and credits. Calculating a progressive tax is not hard: you just see which bracket your income falls into, and then do the simple calculation. Or, you just look it up in a table which most people do.

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

#66

Earlier quoted context omitted.

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?

The unemployment rate is BS. The important number is the labor participation rate.

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

#67
post #60
post #56

Earlier quoted context omitted.

There seem to be some clear flaws with the causal reasoning there. For example, Cyprus is rocking that chart, but isn't a country with a particularly strong welfare system -- the reason it's on top is because it's a popular destination jurisdiction, not because it's a cradle of entrepreneurial spirit. Malta's in a similar boat. Also, strength of social welfare system is not predictive; for example, Sweden is below th…

Sweden is still well above the US and if many countries all have strong safety nets one of them has to be on the bottom of that list. But sure, if you remove countries with less than 10 million you are going to end up with fewer outsiders on lists like this. However, the US is relatively far down on this list relative the way we talk about it as a bastion of innovation. I mean we are just above France which does not…

That demonstrates that strong worker protections doesn't necessarily decrease the number of businesses created. It does not demonstrate the original claim that they promote innovation.

If you look at how the data has changed over time as a proxy (in some cases) for uncertainty on the data, you can see that Sweden's current rates are new. In the 2000s, the US was well ahead of it. However, in the 2000s, the US had a Bush administration; Sweden's social welfare net hasn't significantly changed in relative scope during the last decades. If it is true that social welfare nets promote innovation and companies per capita are a good proxy for innovation, why has that changed?

Number of entities for innovation is a questionable proxy for reasons already mentioned in my grandparent comment. As another example, taking your example of France: regulation changes pretty drastically as company size increases, which promotes creating new companies instead of growing existing ones, artificially driving up the number of entities while not really having a meaningful effect on innovation and only having a small effect on de-facto corporate structure.

If there was a predictive effect, shouldn't we be seeing other evidence of entrepreneurship where at least some of these countries also do well?

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

#68
post #64

Instead of this tax credit for the already-middle-class, why not raise the standard of living in poor areas by investing in education, food security, health care and jobs in those areas? If it works, you raise the poor up to the middle class, reduce dependence on government subsidies, and grow the economy. Let's say you start a business in a poor neighborhood. If you hire locals you're by default investing in the loc…

How do you decide which neighborhoods qualify, and which don't? Just offering a tax credit isn't going to convince many people to start a business in a poor neighborhood anyway; usually, people avoid them because they don't want to work in a poor neighborhood every day, and because they worry about their safety. So are you going to have the government create businesses there? Also, what about poor rural people? It do…

Finding the disadvantaged areas is the comparatively easy part. Many municipalities have maps of neighborhoods that have food insecurity, housing insecurity, an obvious lack of transportation, terrible graduation rates and test scores, high crime rates, and a lack of registered businesses that aren't primarily liquor stores or fast food.

Yes, it is hard to get businesses past the stigma of these neighborhoods. But what's the worst thing that happens? You offer the tax credit and nobody takes it? I think the bigger risk is if they take it, but the government doesn't step up to provide other services that are needed for these businesses to thrive.

No, I would not say having the government open offices is going to do anyone any good. But it could be beneficial to start a program in addition to this credit where the government can go into these neighborhoods and have classes where they teach people how to become local entrepreneurs (I think they do this already in a limited fashion in "nicer" areas)

Mainly my proposal applies to the urban poor, but rural areas still have some untapped opportunity. Take the rest of the world's rural poor as an example: small farmers organize into co-ops whose products are then sold on one or more markets (which depending on the market will be either horrible or great for them). I think in 20+ years when automated transportation starts to become a real thing, we'll be able to more cheaply scale out small manufacturing jobs to rural people. Ideally this could again use a co-op model, but I haven't seen many tech companies with that in mind.

Everything I have mentioned, btw, you could start with a private organization and then get government funding to cover a portion of your expenses. For example, most food banks and school lunch programs get most of their funding privately. They could also re-route some of the ridiculous defense spending back into food assistance programs, which we know is a benefit to local economies.

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

#69
post #65
post #2

I still think $6000 is a large amount in some sense for someone just getting started. I would much rather see this along with a flat tax. The recent discussion on here about USFacts.org highlighted that revenue was growing in proportion to population. What someone had said is that it makes the case for a much simpler tax system. We spend 6 billion man hours a year on taxes in the US. Is that really the best use of ou…

Flat tax is a horrible libertarian idea that simply hurts lower-income people, because to get the same revenue you end up having to massively raise the taxes on the lower classes, which they can't afford since they're already struggling to make ends meet. We've had progressive taxation in this country since the invention of income tax, for good reason. If you want simpler taxes, you don't need a flat tax, you just ne…

Flat tax was just something that came to mind. I am not stuck on the idea, I just think we could have something much simpler than what we have that requires less of peoples time each year. I heard in Canada, the system does it all for you and its much less of a time suck than what we have here.

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

#70
post #47

Lower the taxes and don't let government get their hands on it at any stage of the process. This smacks again of redistribution of wealth and I'm totally against this.

> Lower the taxes and don't let government get their hands on it at any stage of the process. This smacks again of redistribution of wealth and I'm totally against this. Brilliant! I'm sure that startups will flourish in an environment where there is no functioning government. What I don't understand is why the movie Mad Max didn't show a vibrant startup community with flowing rivers of lattes and soylent, rather tha…

How about we start by not attacking straw men?

Objecting to the redistribution of wealth isn't the same as trying to do away with the rule of law.

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