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Canada has a refundable tax credit that many startups take advantage of, known as SR&ED. https://en.wikipedia.org/wiki/Scientific_Research_and_Experimental_Dev

by cbhl 10y ago

Canada has a refundable tax credit that many startups take advantage of, known as SR&ED. https://en.wikipedia.org/wiki/Scientific_Research_and_Experimental_Development_Tax_Credit_Program 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.

snarf21 10y ago
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.
- cbhl 10y ago
  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.
  - snarf21 10y ago
    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. :)
- prostoalex 10y ago
  > 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. Apart from being loaned to companies in exchange for bonds, loaned to various levels of government to support infrastructure projects, or capitalizing companies and decreasing corporate borrowing costs in exchange for equity.
- dragonwriter 10y ago
  > 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. No, it's invested, probably in one or more businesses, and therefore is helping to grow the economy.

by cbhl 10y ago

snarf21 10y ago

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.

cbhl 10y ago
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.
- snarf21 10y ago
  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. :)
prostoalex 10y ago
> 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. Apart from being loaned to companies in exchange for bonds, loaned to various levels of government to support infrastructure projects, or capitalizing companies and decreasing corporate borrowing costs in exchange for equity.
dragonwriter 10y ago
> 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. No, it's invested, probably in one or more businesses, and therefore is helping to grow the economy.