7 ms·

White House initiative to encourage entrepreneurship

32 points by raleec 16y ago

raleec 16y ago
more substantial info (thus far) http://www.startupamericapartnership.org/ http://www.startupamericapartnership.org/
deleted 16y ago
[deleted]
patrickgzill 16y ago
First year of income tax code - max. rate is 7% . Tax code is >400 pages. Now - max rate is ~40%. Tax code is 13,000+ dense pages. Not to mention the red tape at the state level. Reducing the complexity of business formation would by itself, encourage entrepreneurship.
- bryanh 16y ago
  Absolutely, these "initiatives" simply give lip service to the idea of fostering true entrepreneurship. Too bad they are passed off as legitimate actions in most media outlets.
  - moultano 16y ago
    He did mention simplifying the tax code in the state of the union address.
    - jerf 16y ago
      Talk is cheap. I don't mean that as a criticism of Obama specifically. There is a long history of people promising tax simplification. Very little has ever happened, quickly erased by further complexification. (Broadly speaking, they're doing it wrong. The solution to a too-complicated tax code is to fix the incentives Congress has to make a complicated tax code, then let the problem address itself incrementally over several years. Simply burning straight for simplication without addressing the underlying problems is doomed to failure. Of course, trying to address the underlying problems is also mostly doomed to failure, so shrug.)
      - Natsu 16y ago
        > Broadly speaking, they're doing it wrong. The solution to a too-complicated tax code is to fix the incentives Congress has to make a complicated tax code Controlling people's purse strings is a main source of congressional power. I don't see them giving much of that up any time soon...
        jerf 16y ago
        It would take a very-well-thought out Constitutional amendment through a State-powered Constitutional Convention (since Congress isn't going to trim its own wings) at a minimum, I fear. Any one of "very-well-thought out", "Constitutional amendment", and "Constitutional Convention" seems pretty unlikely anytime soon; the combination of all even more so. Still, these are crazy times politically, who knows?
      - bryanh 16y ago
        They should create large tax write-offs based on how complicated your tax return was. That should simplify things! I think...
    - genieyclo 16y ago
      Heads of states say a lot of things they never do.
- cyrus_ 16y ago
  I'm not so sure this is true. For any startup founders here, some questions: 1. How much time did you spend incorporating your business? 2. How much time do you spend per year filing your income taxes, or do you hire an accountant? 3. If the latter, how many billable hours do they put into it? Was this a major expense for your business? There may be a huge step function if they somehow simplify the tax code such that small and medium business owners can do it themselves in a day rather than having to hire an accountant, but anything short of a major overhaul will leave people in roughly the same position I think.
  - dantheman 16y ago
    Look at the entire tax infrastructure - H&R Block and all those accountants basically doing a make work job, that could be eliminated by simplifying the tax structure.
    - eli 16y ago
      Err, I don't think the H&R Block lobby is conspiring with legislators to keep taxes complicated. The tax code is complicated because it's layer upon layer of incentives and disincentives and hacks and amendments and loopholes and counter-loopholes built up over decades. It evolved into its current state, it wasn't built this way.
      - brown 16y ago
        Maybe not H&R Block, but Intuit (TurboTax) sure does... Why Can’t the I.R.S. Help Fill in the Blanks? http://www.nytimes.com/2010/01/24/business/24digi.html?_r=1 http://www.nytimes.com/2010/01/24/business/24digi.html?_r=1 Intuit's end-run http://articles.latimes.com/2010/jul/21/opinion/la-oe-ventry-intuit-20100721 http://articles.latimes.com/2010/jul/21/opinion/la-oe-ventry...
- hinathan 16y ago
  The problem I have with government using tax incentives as a way to spur entrepreneurial growth is that by their nature these incentives reward current activity with future benefits. But the payoff horizon — next year's tax filing – isn't actually useful for a new company. That's why I'm so bullish on using simplified health insurance as an incentive for new business. It provides value and reduces friction on day 1 and continues to do so through the earliest, highest risk phases of a company's lifecycle. Tax incentives reward success but don't help business attain that success.
  - Benjo 16y ago
    Sounds good to me. Unfortunately, politicians have more to gain by giving tax breaks to successful company compared to helping new small businesses, which is probably why there's not a lot of political will for ideas like this.
gcb 16y ago
Government plan is still publishing intentions and not actionable items? I'd expect that to be limited to campaign only
hinathan 16y ago
Number one thing the federal government could do to spur entrepreneurship and innovation: Simple, single-payer (sure, self-paid in cash until my company can foot the bill) health coverage that I don't have to think about. Without this, it's a huge waste of time, money, and cognitive effort to apply for and maintain COBRA and related coverage until your venture can afford it. And you're boned if you can't get to that stage and your COBRA ages out. How many otherwise ambitious, eager tech and business people are locked into their current work situation (or stuck working for big-cap companies) due to pre-existing conditions or the threat of a family health emergency? This applies to all kinds of people, not just the Silicon Valley startup crowd. The health care 'leap of faith' is a huge elephant in the room and a real drag on the growth areas of the economy.
- ChristianMarks 16y ago
  Yes, if anyone understands the role of government as the insurer of last resort, it would be entrepreneurs. The single-payer option is exactly the kind of thing the government should do to cut health coasts costs and encourage economic growth. Private insurance companies can provide additional insurance. But the present system is designed to impose a huge negative externality on would-be entrepreneurs and others who might have left their jobs to pursue other opportunities. And you are subsidizing the profits of the industries that benefit from the relative immobility of labor. That negative externality you pay is someone else's subsidy. If it were up to me, I'd rather pay into a universal health care system than pay the negative externality to stay tied to an employer on account of health care coverage. Another negative externality is the administrative burden imposed on companies to handle employee health care.
  - orangecat 16y ago
    Exactly this. Almost everyone of any political persuasion who has seriously considered the issue agrees that employer-based health insurance is a horrible system. Liberals want to replace it with single payer, I'd prefer a functioning individual market with a subsidized high risk pool for those who are uninsurable, but either would be better than the worst of both worlds that we have today.
ReadyNSet 16y ago
Where can I line up to collect the cash :) seriously the proposals from fairtax.org will go a long way towards encouraging entrepreneurship along with single payer health care but both are politically too risky for any govt.
rmason 16y ago
Am I the only one who thinks Steve Case is about the worst person they could have gotten to be a cheerleader for entrepreneurism?
- nhebb 16y ago
  It's not what you know; it's who you know. Steve Case and Barack Obama both went to Punahou.
- raheemm 16y ago
  Steve Case created a billion-dollar company from scratch... And he seems to have time on his hand
- adammichaelc 16y ago
  Not sure what connection you're making. Steve Case created a billion-dollar company from scratch... What have you done lately?

32 points by raleec 16y ago

raleec 16y ago

more substantial info (thus far) http://www.startupamericapartnership.org/ http://www.startupamericapartnership.org/

deleted 16y ago

[deleted]

patrickgzill 16y ago

First year of income tax code - max. rate is 7% . Tax code is >400 pages. Now - max rate is ~40%. Tax code is 13,000+ dense pages. Not to mention the red tape at the state level. Reducing the complexity of business formation would by itself, encourage entrepreneurship.

bryanh 16y ago
Absolutely, these "initiatives" simply give lip service to the idea of fostering true entrepreneurship. Too bad they are passed off as legitimate actions in most media outlets.
- moultano 16y ago
  He did mention simplifying the tax code in the state of the union address.
  - jerf 16y ago
    Talk is cheap. I don't mean that as a criticism of Obama specifically. There is a long history of people promising tax simplification. Very little has ever happened, quickly erased by further complexification. (Broadly speaking, they're doing it wrong. The solution to a too-complicated tax code is to fix the incentives Congress has to make a complicated tax code, then let the problem address itself incrementally over several years. Simply burning straight for simplication without addressing the underlying problems is doomed to failure. Of course, trying to address the underlying problems is also mostly doomed to failure, so shrug.)
    - Natsu 16y ago
      > Broadly speaking, they're doing it wrong. The solution to a too-complicated tax code is to fix the incentives Congress has to make a complicated tax code Controlling people's purse strings is a main source of congressional power. I don't see them giving much of that up any time soon...
      - jerf 16y ago
        It would take a very-well-thought out Constitutional amendment through a State-powered Constitutional Convention (since Congress isn't going to trim its own wings) at a minimum, I fear. Any one of "very-well-thought out", "Constitutional amendment", and "Constitutional Convention" seems pretty unlikely anytime soon; the combination of all even more so. Still, these are crazy times politically, who knows?
    - bryanh 16y ago
      They should create large tax write-offs based on how complicated your tax return was. That should simplify things! I think...
  - genieyclo 16y ago
    Heads of states say a lot of things they never do.
cyrus_ 16y ago
I'm not so sure this is true. For any startup founders here, some questions: 1. How much time did you spend incorporating your business? 2. How much time do you spend per year filing your income taxes, or do you hire an accountant? 3. If the latter, how many billable hours do they put into it? Was this a major expense for your business? There may be a huge step function if they somehow simplify the tax code such that small and medium business owners can do it themselves in a day rather than having to hire an accountant, but anything short of a major overhaul will leave people in roughly the same position I think.
- dantheman 16y ago
  Look at the entire tax infrastructure - H&R Block and all those accountants basically doing a make work job, that could be eliminated by simplifying the tax structure.
  - eli 16y ago
    Err, I don't think the H&R Block lobby is conspiring with legislators to keep taxes complicated. The tax code is complicated because it's layer upon layer of incentives and disincentives and hacks and amendments and loopholes and counter-loopholes built up over decades. It evolved into its current state, it wasn't built this way.
    - brown 16y ago
      Maybe not H&R Block, but Intuit (TurboTax) sure does... Why Can’t the I.R.S. Help Fill in the Blanks? http://www.nytimes.com/2010/01/24/business/24digi.html?_r=1 http://www.nytimes.com/2010/01/24/business/24digi.html?_r=1 Intuit's end-run http://articles.latimes.com/2010/jul/21/opinion/la-oe-ventry-intuit-20100721 http://articles.latimes.com/2010/jul/21/opinion/la-oe-ventry...
hinathan 16y ago
The problem I have with government using tax incentives as a way to spur entrepreneurial growth is that by their nature these incentives reward current activity with future benefits. But the payoff horizon — next year's tax filing – isn't actually useful for a new company. That's why I'm so bullish on using simplified health insurance as an incentive for new business. It provides value and reduces friction on day 1 and continues to do so through the earliest, highest risk phases of a company's lifecycle. Tax incentives reward success but don't help business attain that success.
- Benjo 16y ago
  Sounds good to me. Unfortunately, politicians have more to gain by giving tax breaks to successful company compared to helping new small businesses, which is probably why there's not a lot of political will for ideas like this.

gcb 16y ago

Government plan is still publishing intentions and not actionable items? I'd expect that to be limited to campaign only

hinathan 16y ago

Number one thing the federal government could do to spur entrepreneurship and innovation: Simple, single-payer (sure, self-paid in cash until my company can foot the bill) health coverage that I don't have to think about. Without this, it's a huge waste of time, money, and cognitive effort to apply for and maintain COBRA and related coverage until your venture can afford it. And you're boned if you can't get to that stage and your COBRA ages out. How many otherwise ambitious, eager tech and business people are locked into their current work situation (or stuck working for big-cap companies) due to pre-existing conditions or the threat of a family health emergency? This applies to all kinds of people, not just the Silicon Valley startup crowd. The health care 'leap of faith' is a huge elephant in the room and a real drag on the growth areas of the economy.

ChristianMarks 16y ago
Yes, if anyone understands the role of government as the insurer of last resort, it would be entrepreneurs. The single-payer option is exactly the kind of thing the government should do to cut health coasts costs and encourage economic growth. Private insurance companies can provide additional insurance. But the present system is designed to impose a huge negative externality on would-be entrepreneurs and others who might have left their jobs to pursue other opportunities. And you are subsidizing the profits of the industries that benefit from the relative immobility of labor. That negative externality you pay is someone else's subsidy. If it were up to me, I'd rather pay into a universal health care system than pay the negative externality to stay tied to an employer on account of health care coverage. Another negative externality is the administrative burden imposed on companies to handle employee health care.
- orangecat 16y ago
  Exactly this. Almost everyone of any political persuasion who has seriously considered the issue agrees that employer-based health insurance is a horrible system. Liberals want to replace it with single payer, I'd prefer a functioning individual market with a subsidized high risk pool for those who are uninsurable, but either would be better than the worst of both worlds that we have today.

ReadyNSet 16y ago

Where can I line up to collect the cash :) seriously the proposals from fairtax.org will go a long way towards encouraging entrepreneurship along with single payer health care but both are politically too risky for any govt.

rmason 16y ago

Am I the only one who thinks Steve Case is about the worst person they could have gotten to be a cheerleader for entrepreneurism?

nhebb 16y ago
It's not what you know; it's who you know. Steve Case and Barack Obama both went to Punahou.
raheemm 16y ago
Steve Case created a billion-dollar company from scratch... And he seems to have time on his hand
adammichaelc 16y ago
Not sure what connection you're making. Steve Case created a billion-dollar company from scratch... What have you done lately?