[hugh4life]

"For example, Romney feels that one of the best ways to inspire entrepreneurs is through tax reform. I’ve been to at least a hundred tech related events in NY over the last couple of years. Not one of them had tax management as the central topic of discussion. Clearly taxes are not the main obstacle that stands in the way of any aspiring entrepreneur executing an idea. Besides, most startups incur net losses for their first several years. What is the corporate tax rate on negative $500,000?"

Where the hell do you think most seed money comes from?

"Romney’s entire “best thing we can do is get out of your way” type of approach is not helpful to your average tech entrepreneur. "

The average tech entrepreneur needs to get over themselves.

[rdl]

Tax rates matter a lot more to "small business creation" than to tech startups, particularly if tech startups are externally financed C corps. Remember, there are two main meanings of entrepreneurship -- one is usually starting a local business (or even just a franchise, or a side business, or whatever), and the other is starting a tech or scalable startup.

Most small businesses are sole proprietorships or in some cases LLC/LLP taxed as partnership, or maybe an S corp, so individual tax rates apply. It's usually a person giving up the potential for a high W2 income (or 1099 income in some cases), taking high risk, in exchange for ongoing annual revenue after a few years.

Lower taxes (or pro-savings tax policies) allow enough capital accumulation for a plumber to set up his own plumbing business, and let a $200k/yr employee who gives up his salary to run a business and hire a few people build up capital from operating profit to expand. As a sole prop, he can't retain earnings, so he has to pay taxes on his profits every year. If he has "lumpy" income (big contract one year), this could be really difficult.

There are totally different kinds of businesses, but really, 95+% of people are going to start the self-funded (or maybe personal debt funded) operating business, not a scalable tech startup. 95% of the jobs are going to come from either tech/scalable startups or self-funded startups which become such runaway successes that they convert to scalable businesses (e.g. Walmart growing from a single store...). So, there's a good argument for tax structure to favor either type.

I also think fixing a few problems (health care, bankruptcy laws restored to pre-2005, reducing regulation/bureaucracy in hiring people, etc.) would encourage particularly the "small business" type even more than lower taxes. I don't think employers should have as much regulatory compliance requirement as they do now -- they shouldn't be collecting taxes, handling healthcare, or really anything other than focusing on their business and direct regulations in their industry (food safety for restaurants, reactor safety for nuclear plants...).

[woodchuck64]

> Where the hell do you think most seed money comes from?

Romney just needs to write out a big fat check to every wealthy person in America and soon technology will be booming. It's so obvious!

[jordanthoms]

You seem to be conflating giving people money, and letting people keep their own money.

[rayiner]

I've always found this concept somewhat amusing. What is "my money?" If I bill $X for my employer, I see maybe 1/3 of that between salary, benefits, and overhead. Is the employer taking 2/3 of "my money?" No, because if the partners weren't bringing in the clients I wouldn't be in a position to bill for that work. The same is true for every employee whose employer profits from their labor. I think the same is true for employers and employees with respect to the government. Is the government taking 1/3 of "my money?" I wouldn't be making that money without the vast array of services the government provides. Now it's not an argument for whether I'm taxed too much or too little, but I feel like the government has a legitimate right to some of the income it helped me earn. I don't think the concept of "my income" makes much sense in an interdependent society with fine-grained division of labor. We act together in large economic units, and there is no naturally right answer to how we divide up the proceeds of that work.

I could move back to my parents home country of Bangladesh if I didn't like the taxes. It's tax burden is 8% of GDP versus 26% of GDP here. I don't for the same reason I don't leave my firm--I make more money even after other people getting their cut than I would on my own.

[yummyfajitas]

I wouldn't be making that money without the vast array of services the government provides.

What services? Please be specific.

Before you cite services like roads, fire protection, etc, please go look at what your taxes are actually spent on: http://www.usgovernmentspending.com/piechart_2010_US_total

[rayiner]

The single thing I benefit from the most is the government's suppression of the physically strong. In the state of nature, people like me would not be at the top of the economic hierarchy. Those gangs on the south side of Chicago, lording over their impoverished little domains, would instead lord over me.

We, through the government, impose rules that favor the smart over the strong, that favor creation over acquisition. These rules enable the wealth of our society. But they are not cost-less, nor are they the natural order of things. There is a large class of losers in this system, and I consider government spending that redistributes some of the fruits of societal production to be part of the cost of imposing these rules.

Moreover, many of these expenditures benefit businesses directly. Public education is an enormous subsidy to the business world. My firm's clients are all large companies that collectively employee millions of people educated on the public dime. Since our economy is built on mental activity, rather than manual labor, it is of enormous benefit to companies to have readily available educated employees. Moreover, many items of spending, such as food aid, primarily go to children. It is a tremendous benefit to the business world to have a next-generation workforce that doesn't suffer from the cognitive issues that can result from malnutrition.

The expenditures that are the hardest to justify are the ones that are generationally redistributive, like Social Security and Medicare. On the other hand, these require the least justification--they are benefits mostly paid for by separately-marked taxes, that every taxpayer can benefit from personally.

And I'm not even going to get started on how tremendously economically valuable agencies like the EPA are.

So before you talk about what our taxes are spent on, try to cultivate some perspective about what exactly enables the incredible wealth we have in our society. As I said, my parents are from a country with far less government than we have. It's hellish. You don't want to live like that, trust me.

[yummyfajitas]

Those gangs on the south side of Chicago, lording over their impoverished little domains, would instead lord over me.

4.4% of government spending protects you from peaceful people who wish to enjoy drugs in the privacy of their own home, as well as the gangs you seem to fear. Another 14.3% protects you from Iraq and the Soviet Union.

As I said, please go look at what the government actually spends your money on before replying.