A recent letter to the editor in the Wall Street Journal pointed out how proposed economic stimulus packages coming out of Washington fail to address the potential of stimulating the startup market.
The letter writer, Eugene Severens of Annapolis, Md., addressed comments made by Sen. Judd Gregg’s , who wrote in a column that most jobs in America are created by small business expanding or entrepreneurs starting businesses. Gregg’s recommended cutting their taxes first.
Severens astutely responded that most business start as sole proprietorships and any proposed business tax cuts should use individual tax laws as wells as corporate tax laws.
He points out that no stimulus proposals recognize the counter-cyclical nature of sole proprietorships.
Severens writes: “According to the IRS, there are over two million first-year self-employed business filers every year. We can expect these numbers to increase for the coming tax season as laid-off workers and distressed, but enterprising, household turn to self-employment.”
Severens cleverly refers to these businesses as “shovel ready” opportunities to stimulate the economy by creating jobs and sparking new purchasing as these new businesses buy computers, office supplies, cellphones, and contract for bookkeeping and phone services.
Severens proposes a startup business tax credit to get them a needed boost, along with a business literacy outreach program.
He concludes: “Unfortunately, the role of these brand new startups in our economy is largely ignored, and , not disconnected, they have no Beltway lobbyists representing them during the current job stimulus debate.
I’m not sure how I feel about Washington’s stimulus mania, but I like the that Severens is helping educate policy makers, or at least WSJ readers, that the startup market has a significant role to play in the current economy.
