6 ms·

I've been saying for a while that the health care system is the biggest impediment to entrepreneurship in the US. Not only does it make it difficult to start a

by beat 10y ago

I've been saying for a while that the health care system is the biggest impediment to entrepreneurship in the US. Not only does it make it difficult to start a company, it makes it difficult to work for startups and small businesses. Employer-provided health insurance is an incredibly strong bias in favor of large corporations (that have dedicated HR and can negotiate rates and self-insure).

radley 10y ago
...and grandfathered programs unaffected by the new rules, allowing access to doctors who aren't participating in the new "negotiated" rates.
taurath 10y ago
Its the same for investing - you /cannot/ tax defer more than $5500 a year of your income for retirement unless you have a COMPANY PROVIDED 401k. There is no such thing if you are a employee at a company that doesn't supply one.
- PaulHoule 10y ago
  Not true, you can put more than that in a SEP IRA.
  - ghaff 10y ago
    As I understand it, it doesn't help you as an employee of a small business though unless the business makes the contribution. SEP IRAs are primarily intended for freelancers and small business owners.
  - TearsInTheRain 10y ago
    Unless I'm mistaken it looks like SEP-IRAs have to be offered by an employer as well: https://en.wikipedia.org/wiki/SEP-IRA https://en.wikipedia.org/wiki/SEP-IRA
    - icedchai 10y ago
      If you're self employed you're your own employer. I've been making SEP contributions for years using my freelance income. I also have a full time job.
- LurkerAbove 10y ago
  If SEP IRAs as mentioned above aren't an option, HSAs might be worth considering - after 65 they aren't restricted to medical expenses. I-bonds might be an interesting component for future retirement as well.
- toomuchtodo 10y ago
  I'd like to see Elizabeth Warren deprecate 401ks and raise the IRA contribution limits accordingly, while legislating that employers can contribute to them directly. Immediately remove employer-tied retirement plans, and you'll see expense ratios of funds plummet when you can have any fiduciary host your account. Its absolutely silly we still tie retirement accounts and healthcare to employers.
  - sillui 10y ago
    I agree but not sure why you'd hope Elizabeth Warren would do this. It's unlikely to come from the left. Donald Trump's platform would actually allow individuals to take the same tax deductions on health insurance that companies get: https://www.donaldjtrump.com/positions/healthcare-reform https://www.donaldjtrump.com/positions/healthcare-reform "Allow individuals to fully deduct health insurance premium payments from their tax returns under the current tax system. Businesses are allowed to take these deductions so why wouldn't Congress allow individuals the same exemptions?" John Mackey had a very rational proposal as well: http://www.wsj.com/articles/SB10001424052970204251404574342170072865070 http://www.wsj.com/articles/SB100014240529702042514045743421... "Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits. Now employer health insurance benefits are fully tax deductible, but individual health insurance is not. This is unfair."
    - omarforgotpwd 10y ago
      Wow, who knew Trump had positions? Someone on his staff should tell him to talk about them rather than continuously drawing attention to attacks from his opponents that he should not even be mentioning. Well, actually let's not because he would not be a stable president for the US economy. Would be nice to have a president that didn't see business as an enemy and tax cuts as handouts for the wealthy though.
      - sharemywin 10y ago
        The problem with lowering taxes for the wealth is they invest it. which drives up asset prices. makes them feel good, because the assets values went up but it didn't create anymore actual assets or create anything more productive. Corporations are flush with cash and investing in new technology as fast as they can. Throwing money at the problem won't fix anything.
- up_and_up 10y ago
  Just start your own business and shelter the money in an i401K, SEP IRA or Simple IRA: https://investor.vanguard.com/what-we-offer/small-business/compare-plans?Link=facet https://investor.vanguard.com/what-we-offer/small-business/c... "For the 2016 tax year, overall employer plus employee contribution limit is 100% of compensation with a maximum of $53,000"
  - taurath 10y ago
    If you're already employed full time and your paychecks go directly to you its only possible if your employer is okay with paying you as a contractor, which of course makes their situation with you more complicated, and also you might have trouble getting health insurance through the company.
    - up_and_up 10y ago
      I am saying moonlight on the side in addition to the fulltime job and stash that money away.
- icedchai 10y ago
  Not true. If you have self employment income you can do a SEP IRA. That's something like 25% or up to 53k, which ever is less.
  - taurath 10y ago
    Thats right - but if you're employed at a place that doesn't offer a 401k, and not self employed you can't do anything.
    - icedchai 10y ago
      You can look for some side work.
intrasight 10y ago
If that were true, then Canada would be the startup mecca. Why then is it not?
- dmix 10y ago
  All of our smart entrepreneurs go to Silicon Valley where the money and other talent is? I live in Toronto and can't count the number of friends I've know who moved to either SF or Seattle. The only reason I didn't move there was because I didn't have a 4yr "advanced degree" to qualify for a T1 visa (despite having a job + lawyer). Most leave right out of university. Considering jobs are $60-70k vs $150-200k I don't blame any of them. Otherwise I believe it's a pretty good place to start a company. Our income taxes are equivalent to California and I believe our corporate taxes are lower but we have health care and relatively cheap housing downtown thanks to a housing development boom. We also have a startup founder visa and an easier immigration policy. Access to seed capital and higher-end talent is the only constraint.
  - intrasight 10y ago
    But people moving to take jobs aren't people moving to start companies. I lived in Toronto in the late '80s and found it to have a pretty decent startup culture. My wife worked for Alias at the time.
  - jtmcmc 10y ago
    I don't understand why there is such a huge salary difference between Toronto and SF. I'd love to move to Toronto but really don't want to take that huge salary hit.
    - hash-set 10y ago
      You should see how much the Canadian government taxes you before you do anything.
      - mahyarm 10y ago
        It's about even from the personal income tax side in california. Companies don't pay for healthcare so that 'tax' is gone. I don't think there is much of a difference past that.
ythl 10y ago
> I've been saying for a while that the health care system is the biggest impediment to entrepreneurship in the US. So why isn't Europe an entrepreneural juggernaut? Tech scene in Europe seems worse than the US IMO.
- dasil003 10y ago
  Maybe because there are other factors than just the one that the US gets very wrong?
  - hash-set 10y ago
    Europe is over-taxed and over-regulated and the US is, too. We're killing our golden goose as we speak. It was completely avoidable, but leftism just feels so good. We should be hanging the people that caused this, but we're too nice and we won't until it all ends up like Venezuela.
- beat 10y ago
  Have you read pg's essay "Cities and Ambition"? He explains there why there isn't a Silicon Valley outside of Silicon Valley. Different cities have different cultures, and encourage different things. The cities of Europe are ancient. Their ambitions were set long ago. That said, there's much more to "entrepreneurship" than tech startups! Opening your own restaurant - not a chain franchise - is entrepreneurship, too. Or a barbershop, or making custom clothing, or running a small theater, or any number of other things. Small business is mostly small, not a stepping stone on the way to being huge. In those terms, is the US actually doing better than Europe? Do entrepreneurs - not the millionaires, just the people who don't have to answer to anyone but themselves - do better here, or in Europe?
Angron 10y ago
if the left used your argument they would convince so many people on the right.

by beat 10y ago

radley 10y ago

...and grandfathered programs unaffected by the new rules, allowing access to doctors who aren't participating in the new "negotiated" rates.

taurath 10y ago

Its the same for investing - you /cannot/ tax defer more than $5500 a year of your income for retirement unless you have a COMPANY PROVIDED 401k. There is no such thing if you are a employee at a company that doesn't supply one.

PaulHoule 10y ago
Not true, you can put more than that in a SEP IRA.
- ghaff 10y ago
  As I understand it, it doesn't help you as an employee of a small business though unless the business makes the contribution. SEP IRAs are primarily intended for freelancers and small business owners.
- TearsInTheRain 10y ago
  Unless I'm mistaken it looks like SEP-IRAs have to be offered by an employer as well: https://en.wikipedia.org/wiki/SEP-IRA https://en.wikipedia.org/wiki/SEP-IRA
  - icedchai 10y ago
    If you're self employed you're your own employer. I've been making SEP contributions for years using my freelance income. I also have a full time job.
LurkerAbove 10y ago
If SEP IRAs as mentioned above aren't an option, HSAs might be worth considering - after 65 they aren't restricted to medical expenses. I-bonds might be an interesting component for future retirement as well.
toomuchtodo 10y ago
I'd like to see Elizabeth Warren deprecate 401ks and raise the IRA contribution limits accordingly, while legislating that employers can contribute to them directly. Immediately remove employer-tied retirement plans, and you'll see expense ratios of funds plummet when you can have any fiduciary host your account. Its absolutely silly we still tie retirement accounts and healthcare to employers.
- sillui 10y ago
  I agree but not sure why you'd hope Elizabeth Warren would do this. It's unlikely to come from the left. Donald Trump's platform would actually allow individuals to take the same tax deductions on health insurance that companies get: https://www.donaldjtrump.com/positions/healthcare-reform https://www.donaldjtrump.com/positions/healthcare-reform "Allow individuals to fully deduct health insurance premium payments from their tax returns under the current tax system. Businesses are allowed to take these deductions so why wouldn't Congress allow individuals the same exemptions?" John Mackey had a very rational proposal as well: http://www.wsj.com/articles/SB10001424052970204251404574342170072865070 http://www.wsj.com/articles/SB100014240529702042514045743421... "Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits. Now employer health insurance benefits are fully tax deductible, but individual health insurance is not. This is unfair."
  - omarforgotpwd 10y ago
    Wow, who knew Trump had positions? Someone on his staff should tell him to talk about them rather than continuously drawing attention to attacks from his opponents that he should not even be mentioning. Well, actually let's not because he would not be a stable president for the US economy. Would be nice to have a president that didn't see business as an enemy and tax cuts as handouts for the wealthy though.
    - sharemywin 10y ago
      The problem with lowering taxes for the wealth is they invest it. which drives up asset prices. makes them feel good, because the assets values went up but it didn't create anymore actual assets or create anything more productive. Corporations are flush with cash and investing in new technology as fast as they can. Throwing money at the problem won't fix anything.
up_and_up 10y ago
Just start your own business and shelter the money in an i401K, SEP IRA or Simple IRA: https://investor.vanguard.com/what-we-offer/small-business/compare-plans?Link=facet https://investor.vanguard.com/what-we-offer/small-business/c... "For the 2016 tax year, overall employer plus employee contribution limit is 100% of compensation with a maximum of $53,000"
- taurath 10y ago
  If you're already employed full time and your paychecks go directly to you its only possible if your employer is okay with paying you as a contractor, which of course makes their situation with you more complicated, and also you might have trouble getting health insurance through the company.
  - up_and_up 10y ago
    I am saying moonlight on the side in addition to the fulltime job and stash that money away.
icedchai 10y ago
Not true. If you have self employment income you can do a SEP IRA. That's something like 25% or up to 53k, which ever is less.
- taurath 10y ago
  Thats right - but if you're employed at a place that doesn't offer a 401k, and not self employed you can't do anything.
  - icedchai 10y ago
    You can look for some side work.

intrasight 10y ago

If that were true, then Canada would be the startup mecca. Why then is it not?

dmix 10y ago
All of our smart entrepreneurs go to Silicon Valley where the money and other talent is? I live in Toronto and can't count the number of friends I've know who moved to either SF or Seattle. The only reason I didn't move there was because I didn't have a 4yr "advanced degree" to qualify for a T1 visa (despite having a job + lawyer). Most leave right out of university. Considering jobs are $60-70k vs $150-200k I don't blame any of them. Otherwise I believe it's a pretty good place to start a company. Our income taxes are equivalent to California and I believe our corporate taxes are lower but we have health care and relatively cheap housing downtown thanks to a housing development boom. We also have a startup founder visa and an easier immigration policy. Access to seed capital and higher-end talent is the only constraint.
- intrasight 10y ago
  But people moving to take jobs aren't people moving to start companies. I lived in Toronto in the late '80s and found it to have a pretty decent startup culture. My wife worked for Alias at the time.
- jtmcmc 10y ago
  I don't understand why there is such a huge salary difference between Toronto and SF. I'd love to move to Toronto but really don't want to take that huge salary hit.
  - hash-set 10y ago
    You should see how much the Canadian government taxes you before you do anything.
    - mahyarm 10y ago
      It's about even from the personal income tax side in california. Companies don't pay for healthcare so that 'tax' is gone. I don't think there is much of a difference past that.

ythl 10y ago

> I've been saying for a while that the health care system is the biggest impediment to entrepreneurship in the US. So why isn't Europe an entrepreneural juggernaut? Tech scene in Europe seems worse than the US IMO.

dasil003 10y ago
Maybe because there are other factors than just the one that the US gets very wrong?
- hash-set 10y ago
  Europe is over-taxed and over-regulated and the US is, too. We're killing our golden goose as we speak. It was completely avoidable, but leftism just feels so good. We should be hanging the people that caused this, but we're too nice and we won't until it all ends up like Venezuela.
beat 10y ago
Have you read pg's essay "Cities and Ambition"? He explains there why there isn't a Silicon Valley outside of Silicon Valley. Different cities have different cultures, and encourage different things. The cities of Europe are ancient. Their ambitions were set long ago. That said, there's much more to "entrepreneurship" than tech startups! Opening your own restaurant - not a chain franchise - is entrepreneurship, too. Or a barbershop, or making custom clothing, or running a small theater, or any number of other things. Small business is mostly small, not a stepping stone on the way to being huge. In those terms, is the US actually doing better than Europe? Do entrepreneurs - not the millionaires, just the people who don't have to answer to anyone but themselves - do better here, or in Europe?

Angron 10y ago

if the left used your argument they would convince so many people on the right.