Maybe an option to encourage startups is to offer a tax break for the first 12-24 months, if they create x (5 or 10) jobs.
Irrespective of if the founders are US Citizen or Permanent residents.
The problem with this is the potential for massive gaming. The argument of non-startups would be why should they be penalized for having hired people before this period or are considering laying them off and would not otherwise be viable without the tax advantage?
Ideally they would make the tax incentives permanent - ie reduce payroll taxes if the goal is to increase employment, but I think the startup visa is a much more interesting alternative as it seeks to attract talent that traditionally is difficult to define but is so important to how vibrant an economy is. In theory, just the fact these people bring viable ideas that people want to fund should be sufficient irrespective of jobs they create.
Forgive my ignorance, but can you explain how Microsoft games the system with H1-B's?
re: tax breaks for increasing the number of employees, here's a fairly balanced posting on the subject: http://business.theatlantic.com/2009/10/would_a_payroll_tax_... - of course on a more fundamental level, payroll taxes always has struck me as odd considering essentially it's a tax on companies for hiring folks.
For me, a permanent reduction would be a far greater incentive to hire people because at least for me, I hope that I am hiring someone for more than a year or two which is when presumably the tax breaks would expire.
Ideally they would make the tax incentives permanent - ie reduce payroll taxes if the goal is to increase employment, but I think the startup visa is a much more interesting alternative as it seeks to attract talent that traditionally is difficult to define but is so important to how vibrant an economy is. In theory, just the fact these people bring viable ideas that people want to fund should be sufficient irrespective of jobs they create.