Congress Actually Helping The Internet, Rather Than Mucking It Up?

from the could-it-be? dept

We're so used to Congress trying to muck up the internet, that it's rare we hear about cases where they're actually looking to make things better. While the idea has been floating around for a little while, (and the actual bill was introduced back in December when we were focused on the whole SOPA/PIPA debate), the Startup Act is starting to get some attention, with co-sponsors Senators Jerry Moran and Mark Warner taking to the WSJ to explain why the Startup Act is important. The basic idea behind the bill is to remove some of the regulatory hassles of starting and building a new company. As we've pointed out repeatedly, studies have shown that pretty much all of the net job growth in the US comes from startups, and a bill like the Startup Act should help make it easier for startups to get going. To be honest, the bill could be even stronger in a bunch of places, but as a starting point, it's definitely nice to see. The focus is on making it easier for startups to be startups by doing the following:
  • It will make permanent a capital gains tax exemption on the sale of certain kinds of small business stock that is held for at least five years. In other words, it will encourage long-term investment in startups, which is just the kind of investing we should be encouraging (rather than quick flip type investing, which is more about gambling on changes, rather than investing in economic growth).
  • It decreases corporate taxes on new businesses during their first three years of profitability -- again making it easier for young companies to grow and to reinvest their own profits in jobs and growth.
  • While it doesn't do away with crippling government regulations for small businesses, it does require a cost-benefit analysis of the economic impact of many of those regulations on startups.
  • It implements a simplified form of the startup/founders visa -- which is about helping non-Americans start companies and create jobs in the US. We've talked about the startup visa in the past and why it's a good idea. No matter how you feel about other immigration issues, this one is pretty clearly about having immigrants create jobs in the US (rather than elsewhere).
There are a few other things in the bill, but overall the key point is to basically get overbearing regulations out of the way. These are regulations that bog down many startups (or prevent them from getting started at all), and really put a drain on the key part of the economy that is contributing to both job growth and economic growth. It's rare to see Congress trying to do something that helps the internet, rather than mucks it up, so we should certainly highlight when such efforts are being pushed forward. I have a few quibbles around the edges on pieces of the bill, and really think it should go further in other areas, but on the whole it's a really good start.

Filed Under: jerry moran, mark warner, startup act, startups

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  1. identicon
    Anonymous Coward, 10 Feb 2012 @ 4:51am

    Startup/founder's VISA

    No, Mike, just no.

    If the only reason we want to allow them in is an idea well I can guarantee that an American has the same business idea. The only issue is that maybe the foreign businessperson has capital ready to spend. There are always was for people to immigrate to the US. What we need more and better ways for American startups to find capital.

    For instance, I work for a company that was founded by an Indian gentleman and although he has 15 people working for him in the US, he has 75 working for him in India and he moved his family back to India and sends all of his profits back to India. He came here on a student VISA to get a Masters and then decided to stay here to work for a company until he saw an opportunity to start a company. He spends half of the year in India and half here. So I guess you could say that he's a boon for his US employees is it a big enough of a boon to legislate special VISAs just for startups?

    It's like foreign student VISAs. More than half of the PhD students in the US are foreign-born. And the excuse that I have always heard universities use to justify that is that if we teach these foreign students the American way that they will go back to their countries and spread goodwill for America. However, most of them never go back. They decided that they like it here and don't leave. So the universities have screwed over American citizens with credentials that were just as good or better than a foreign student just because they were Americans.

    As long as the startup/founder VISA was written that the foreign citizen has to deposit a substantial sum in an American bank and that the company was to be audited for it's first 3 to 5 years to ensure they were actually trying to build a legitimate business then I would be for it. But if it was written to just allow more people to come into the US willy nilly then I would be opposed to it 100%.

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