How Washington Can Support Entrepreneurs • Hacker News Board

Re: How Washington Can Support Entrepreneurs

#11

Post by gojomo » Wed, May 27, 2009, 11:22 PM UTC

philwelch wrote: post #8

caffeine wrote: post #7

Earlier quoted context omitted.

I don't think you deserve such down-voting ... Paul Graham's page has a link to T.J. Rodgers' congressional testimony to this very point. However, there is "support" and there is throwing money. You're right about throwing money, but I think you're wrong about intelligent support. DC can always, _always_ do a better job by: 1) Not subsidizing anyone, ever. 2) Increasing transparency of its laws 3) Taxing negative ext…

"Taxing negative externalities rather than positive ones (so tax carbon instead of capital gains)" Problem: Negative externalities are supposed to go away. At which point you have no money. So you have to tax things (like income) that people just aren't going to do away with!

Taxing the negative externality behavior doesn't have the aim of eliminating it -- just causing it to be weighed properly in the firm's decisions.

But, you do have a point because 'proper' tax rates for negative externalities only pay for abatement/offset of the externalities' harm. You can't count exclusively on such taxes to pay for other unrelated public goods. (If you did, you'd be overtaxing the externality, causing underproduction of the related goods, which can be just as damaging to overall welfare as the original unabated negative externalities...)

Re: How Washington Can Support Entrepreneurs

#12

Post by troystribling » Wed, May 27, 2009, 11:24 PM UTC

sachinag wrote: post #5

lallysingh wrote: post #3

Especially for techies, there are some good programs available for people who want to try a startup. Specifically SBIR (small business innovative research) and STTR (Small business Technology TRansfer) are really well suited to get money to get your feet off the ground. And they don't want any equity in return, they just want to be a customer!

You're kidding, right? No, seriously, you're kidding, right? They're predicated on "protectable IP" and only go to established companies - i.e. your side project doesn't qualify unless you've already incorporated. I could go on, but I already did: http://www.businessinsider.com/economic-advice-from-an-entre...

When I worked for NASA I knew several researchers who were funded through NASA's SBIR program as independent investigators.

Re: How Washington Can Support Entrepreneurs

#13

Post by philwelch » Wed, May 27, 2009, 11:40 PM UTC

gojomo wrote: post #11

philwelch wrote: post #8

Earlier quoted context omitted.

"Taxing negative externalities rather than positive ones (so tax carbon instead of capital gains)" Problem: Negative externalities are supposed to go away. At which point you have no money. So you have to tax things (like income) that people just aren't going to do away with!

Taxing the negative externality behavior doesn't have the aim of eliminating it -- just causing it to be weighed properly in the firm's decisions. But, you do have a point because 'proper' tax rates for negative externalities only pay for abatement/offset of the externalities' harm. You can't count exclusively on such taxes to pay for other unrelated public goods. (If you did, you'd be overtaxing the externality, cau…

"Taxing the negative externality behavior doesn't have the aim of eliminating it -- just causing it to be weighed properly in the firm's decisions."

But it does tend to reduce the externality, thus reducing tax base. Which interferes with revenue collection.

Re: How Washington Can Support Entrepreneurs

#14

Post by mackeeeavelli » Thu, May 28, 2009, 2:45 AM UTC

Washington has one purpose today - feed the beast. Entrepreneurship and small business isn't on anyone's radar that matters. I can assure you that Pelosi, Frank, Obama and Maxine Waters - none of whom have ever been in business - couldn't care less about an Entrepreneurs dreams or ambitions. They're blinded by their own.

Re: How Washington Can Support Entrepreneurs

#15

Post by rdl » Thu, May 28, 2009, 4:37 AM UTC

There is a lot government can do to help, mainly by doing less:

1) Reverting bankruptcy laws to pre-2005

2) Health care availability for individuals (if I knew the perfect solution to US health care I'd be doing that as a startup, but some decoupling of employment and health care is key

Re: How Washington Can Support Entrepreneurs

#16

Post by caffeine » Thu, May 28, 2009, 12:47 PM UTC

showerst wrote: post #10

caffeine wrote: post #7

Earlier quoted context omitted.

I don't think you deserve such down-voting ... Paul Graham's page has a link to T.J. Rodgers' congressional testimony to this very point. However, there is "support" and there is throwing money. You're right about throwing money, but I think you're wrong about intelligent support. DC can always, _always_ do a better job by: 1) Not subsidizing anyone, ever. 2) Increasing transparency of its laws 3) Taxing negative ext…

1) Not subsidizing anyone, ever. Actually not subsidizing can be non-optimal in a wide range of situations, although in general intervention is questionable. We'd have no tech industry at all in Asia if it weren't for HEAVY industry subsidization in early stages in Japan, Korea, and Taiwan, followed by the wildly successful Chinese special export zones (which are, to some extent, just a loosening of laws, but also in…

Subsidies: Well then at least stop subsidizing the damnable biodiesel producers (/me dons flame-proof underwear).

Re-Rant: I took a degree in economics, concluded it was mathematical proof that economics is largely about whimsical playing with unrealistic models, and now deride (most) economists ;)

The point of my post was mainly that beyond protecting basic institutions, much economic law-making does more harm than good, not through ill-intention but because economics does not predict well the effects of the laws, and when it does, the actions it suggests are rarely politically sexy.

Conversely, intelligent law removal often does more good than harm. Reversing drugs policy, much of tax policy, much of foreign policy (why do we have so many bases in Germany again?), and policies that (as you so rightly say) "pick winners." These last are the most infuriating, as they are simultaneously destructive _and_ presumptuous.

Re: How Washington Can Support Entrepreneurs

#17

Post by caffeine » Thu, May 28, 2009, 12:52 PM UTC

philwelch wrote: post #8

caffeine wrote: post #7

Earlier quoted context omitted.

I don't think you deserve such down-voting ... Paul Graham's page has a link to T.J. Rodgers' congressional testimony to this very point. However, there is "support" and there is throwing money. You're right about throwing money, but I think you're wrong about intelligent support. DC can always, _always_ do a better job by: 1) Not subsidizing anyone, ever. 2) Increasing transparency of its laws 3) Taxing negative ext…

"Taxing negative externalities rather than positive ones (so tax carbon instead of capital gains)" Problem: Negative externalities are supposed to go away. At which point you have no money. So you have to tax things (like income) that people just aren't going to do away with!

Of course - _if_ you've already taxed away every negative externality ;) Also, this is much more easily said than done. What, exactly, is the price of a drowning polar bear, and how much of it is subsumed into the present discounted value of a flooded coastal city?

The reason I singled out capital gains is that it can often lead to a genuine positive externality: capital accumulated in the hands of those best able to discriminatively lend it out (i.e. not bankers). I liked Rodgers' suggestion of taxing short-term capital gains (taxing negative effects of short-term speculation) but not long-term ones. There are probably even more finely-grained policies that can work here.

Re: How Washington Can Support Entrepreneurs

#18

Post by showerst » Thu, May 28, 2009, 5:39 PM UTC

caffeine wrote: post #16

showerst wrote: post #10

Earlier quoted context omitted.

1) Not subsidizing anyone, ever. Actually not subsidizing can be non-optimal in a wide range of situations, although in general intervention is questionable. We'd have no tech industry at all in Asia if it weren't for HEAVY industry subsidization in early stages in Japan, Korea, and Taiwan, followed by the wildly successful Chinese special export zones (which are, to some extent, just a loosening of laws, but also in…

Subsidies: Well then at least stop subsidizing the damnable biodiesel producers (/me dons flame-proof underwear). Re-Rant: I took a degree in economics, concluded it was mathematical proof that economics is largely about whimsical playing with unrealistic models, and now deride (most) economists ;) The point of my post was mainly that beyond protecting basic institutions, much economic law-making does more harm than…

Yea, I definitely agree with you there.

My inner nerd just begins to rage whenever I any absolute statements about econ, especially with respect to policy. Gotta love seeing how ideas go from (hopefully) well meaning in theory to the distortionary, favor-ridden crap that gets passed into law sometimes.