At NVCA we are committed to helping policymakers craft pro-growth policies that help startups continue to drive the U.S. economy and encourage job creation. So when we see articles that fail to understand how innovation and entrepreneurship work, it is our responsibility to correct the record. This recent article in Politico makes just this mistake and threatens to undermine public support for an important provision of the tax code that encourages investment in early stage startups.
Let us start with a couple of facts that we should all keep in mind. Twenty-five years ago, more than 90 percent of global venture capital was invested in U.S. entrepreneurs. Last year, U.S. startups attracted 54 percent of global venture capital investment as other countries continue to reform their policies to build their ecosystems and compete with our long-held leadership in the space. In addition, smaller C corporations have been vanishing. As a result, the total number of U.S. public companies have been reduced by half in only 20 years. (more…)
Like clockwork, with each new Congress comes a renewed push to embark on a wholesale rewrite of our nation’s tax code. Sure enough, the start of the 114th Congress is proving no different. Not only did President Obama touch on his priorities for tax reform in his State of the Union address last night, but the Senate Finance Committee recently announced the formation of five bipartisan working groups to develop concepts for a tax reform proposal. All of this comes after Rep. Paul Ryan (R-WI), the newly minted Chairman of the House Ways and Means Committee, announced his own intentions to proceed with a separate tax reform proposal in the House after he took over the gavel of the chamber’s tax-writing committee. (more…)
In late June, Senate Finance Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT) proposed jump-starting tax reform by starting with a “blank slate” that eliminates all tax expenditures – both corporate and individual – in the code. They then asked their Senate colleagues to formally weigh in on which expenditures or credits should be added back into the code, based on which provisions would help grow the economy or make the tax code fairer. (more…)