Dec 08 2011
Steve Case and Kauffman Foundation Join Senators to Introduce the Startup Act
WASHINGTON, D.C. – U.S. Senators Jerry Moran (R-Kan.) and Mark Warner (D-Va.) today introduced bipartisan legislation aimed at jumpstarting the economy through the creation and growth of new businesses. The Startup Act outlines a five-prong approach to job creation based on the proven track record of entrepreneurs.
"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."
“Encouraging early-stage investment and growth in these fast-growing, entrepreneurial start-up businesses is one of the best ways to create new jobs,” Sen. Warner said. “This legislation includes new tools that will renew the focus on tech startups and help unleash the next wave of American entrepreneurs."
The legislation focuses on five pro-growth principles: 1) reducing regulatory burdens; 2) attracting business investment; 3) accelerating the commercialization of university research; 4) attracting and retaining entrepreneurial talent; and 5) encouraging pro-growth state and local policies.
According to analysis conducted by the Ewing Marion Kauffman Foundation, companies less than 5 years old accounted for nearly all net job creation in the United States between 1980 and 2005. In fact, new firms create on average approximately 3 million jobs each year. The principles included in the Startup Act are based on the extensive research and analysis conducted by the Kauffman Foundation, and many of the Startup Act’s provisions build on the recommendations of President Obama’s Council on Jobs and Competitiveness.
“Senators Warner and Moran recognize the important role entrepreneurs play in job creation and I commend them for working across party lines to improve the environment for entrepreneurs to start and grow their firms,” said Steve Case, CEO of Revolution LLC and a member of the President’s Council on Jobs and Competitiveness. “By increasing access to capital, lowering the tax and regulatory burden on young businesses, and attracting the world’s best and brightest entrepreneurs to the United States, the Startup Act will play an important role in helping to create the next generation of iconic American companies."
“Kauffman research makes clear that there is a need for a major legislative jumpstart of our nation’s entrepreneurial engine,” said Carl Schramm, Kauffman Foundation 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.
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