Quick question. What do you know about recent events in government that could impact your business?
By my notes, I do not want to convey any political message with the items that follow. I intend to point out that, yes, there are some things going on that positively impact entrepreneurism and small businesses. I wish there were lots more.
As of the week of July 9th several government activities are progressing through the Congress. Here are just three of them worth looking into.
(1) The Build Act of 2012 is a collaborative effort between government and the private sector to put in place a private-public bank for the purpose of funding and investing in infrastructure improvements. The purpose of the Build Act is to substitute in large portion private investment fund sources in place of taxpayer money. It provides each locality and state access to capital they might otherwise not been available. This concept has been around for several years but only recently in light of economic conditions and the state of our infrastructure, finally is receiving bipartisan interest and moving forward.
At a time when financial institutions and investors alike have money to invest, it makes sense that a government protected program come in to existence that can shore up our aging infrastructure. Many of the major countries in the world have had such a mechanism in place for years with measureable positive impact on their local economies. It is most certainly a no-brainer.
(2) the Start-Up 2.0 Act of 2012 co-sponsored by Senators Marco Rubio (R) and Jerry Moran (R), and Mark Warner (D) and Chris Coons (D), provides incentives for foreign students in Doctoral and Master’s degree programs in the areas Science, Technology, Engineering, and Mathematics (STEM) who take advantage of our hospitality, are given (through application) green cards when they graduate to stay in this country and use their skills to the betterment of the economy. Also not surprisingly, this program exists in other countries desiring to keep the reverse brain drain from occurring. Essentially, it maximizes the impact of grants, student loans, and scholarships used by foreign students. Studies, such as those from the Kauffman Foundation (see next week’s column for more information related to ethnic backgrounds of entrepreneurs), show an increased contribution to entrepreneurism from immigrants.
Although this does not fall in the general category of a no-brainer, it makes sense to acknowledge the potential contribution from advanced degree students who want to try their hand at contributing to our economy and give them a chance to exercise their own personal creativity and variety of success.
(3) The Small Business Jobs and Tax Relief Act of 2012 was contributed by Senators Harry Reid (D) and Chuck Schumer (D) has also received bipartisan support as it provides a 10 per cent tax credit for new hiring, and allows for complete write offs (read accelerated depreciation) of capital investments in machinery and equipment that contributes to expansion and growth, in other words, tied specifically to business expansion and not modernization (modernization still uses the existing long term tax methods related to depreciation). This one is a kind-of-no-brainer, but it seems like a lot more could have been done for entrepreneurs and small businesses to this point in time.
It seems that these three examples did not receive much in the way of publicity, but do show interest and progress in focusing in on the concrete issues that impact entrepreneurism and small businesses. You would think, perhaps, that in an election year and late in the campaigning at that, that more could have been done, earlier and with more support from both parties, to stimulate the economy and lay claim to their own contributions to improving our current situation.
The good news for most go-it-themselves entrepreneurs is that you get the ball rolling in the vast majority of instances by yourself. When you gain momentum enough to need additional incentives, tax breaks and credits, they will aid in improving your sustainability and potentially contribute to your long term success.
In the next installment on the subject of entrepreneurism, we will examine some recent findings from the Kauffman Foundation (www.kauffman.org) showing some not too subtle changes in some patterns of entrepreneurism over the last couple of decades.