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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...). |