Silicon Prairie News

Senators introduce Startup Act, aim to boost new business growth (Video)

Washington, D.C. December 13, 2011 by Michael Stacy

Sen. Jerry Moran (from left), Sen. Mark Warner and Steve Case, co-founder of AOL and a member of the President's Council on Jobs and Competitiveness, were on hand in Washington, D.C. last week to unveil the Startup Act. Photo from moran.senate.gov.

U.S. Senators Jerry Moran (R-Kan.) and Mark Warner (D-Va.) late last week introduced The Startup Act, a piece of bipartisan legislation aimed at jump-starting the economy through the creation and growth of new businesses.The act outlines a five-prong approach to job creation based on the proven track record of entrepreneurs. (Image, left, from moran.senate.gov

Those five pro-growth principles are:

  1. Reducing regulatory burdens
  2. Attracting business investment
  3. Accelerating the commercialization of university research
  4. Attracting and retaining entrepreneurial talent
  5. Encouraging pro-growth state and local policies
“The private sector has been the engine of job creation in our country throughout history, and to get America’s economic engine roaring once again, entrepreneurs must be free to pursue their ideas, form companies, and hire employees,” Sen. Moran said. “Congress must put into place policies that remove barriers and help entrepreneurs succeed, so new businesses can grow and put Americans back to work.”

In July, the Ewing Marion Kauffman Foundation introduced its own version of the Startup Act. The legislation borrows heavily from research conducted by the Kauffman Foundation, which is based in Kansas City, Mo.
 
According to Kauffman Foundation data, companies less than five years old accounted for nearly all net job creation in the United States between 1980 and 2005, and those companies create an average of about 3 million jobs each year. 
 
“Kauffman research makes clear that there is a need for a major legislative jump-start of our nation’s entrepreneurial engine,” said Carl Schramm, the Kauffman Foundation's president and CEO. “With virtually all net job creation coming from companies less than five years old, entrepreneurs are a critical force for U.S. economic growth.”
 
If enacted, the Startup Act would do the following:
  • Require a cost-benefit analysis of proposed regulations with an economic impact of $100 million or more to determine the efficacy of the rule and its potential effects on the formation and growth of new businesses
  • Make permanent the capital gains tax exemption for investments held for five years in Qualified Small Businesses (QSB), giving investors an incentive to partner with entrepreneurs and helping provide financial stability for the first few years of a new business’ life
  • Provide a corporate tax credit of up to $5 million for QSBs in the first taxable year of profit, followed by a 50 percent corporate income tax exclusion in the two succeeding taxable years, to help startups finance growth;
  • Open the door for reforms to the Sarbanes-Oxley Act of 2002
  • Use existing federal research and development funding to support innovative projects at American universities in order to accelerate and improve the commercialization of cutting-edge technologies developed through faculty research
  • Create a STEM Visa for up to 50,000 immigrants per year who graduate with a Masters of Ph.D. in science, technology, engineering or mathematics, giving them the opportunity to stay in the United States and put their skills to work
  • Create an Entrepreneur’s Visa for up to 75,000 immigrant entrepreneurs who register a business and employ at least two non-family member employees, and invest in their business within one year of obtaining the visa. Current H-1B Visa holders or those who have completed graduate level work in a STEM field would qualify; and
  • Encourage successful pro-growth state and local policies by studying state laws that affect new business formation and economic growth

Fore more on the Startup Act, check out the full version (PDF). For more from Moran and Warner, watch the video below (video from Moran's channel on YouTube). After brief discussion of other issues, the senators address the Startup Act beginning at the 1:39 mark.

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