General Discussion

Below is a message I sent to all 3 of the presidential candidates.  With the economy stagnant at best I thought they should hear about it.  To me the economy is the most important national problem right now.

This is just and idea I really liked and I thought I would pass it along.  This IS NOT my idea, it is from William J. O'Neil in his book "The Successful Investor".  Also for all I know it could have already been implemented in one form or another.

It could be called the The Small Business Creation Act.  "... people who start a new business to pay no income tax on the business for the first two years and only one-half the normal rate for the next two years.  also let principals or employees who own stock in the new company pay only one-half the normal capital gains rate on the stock they sell for the first 10 years."

"This will create a stampede of new entrepreneurial small businesses in America. ... Bigger, older businesses downsize."

"It will not cost the government anything since the huge increase in start-ups will be companies that do not now exist.  Few new businesses make much in the first year or two. ..."

They will create hundreds of thousands of new jobs and new individual taxpayers.

He also goes on to say that this new income will "... increase the government's income by $39 billion over the first five years and have no adverse affect on the deficit. ..."  "... an extra 100,000 new businesses and 530,000 new jobs (5.3 per small employer) in the first year."
For five years "... income taxes from 366,667 new businesses and from the 2.855 million new job holders making an average of $27,000. ..."

"After 5 years they would also have more employees and better sales.  They will need to buy furniture, office supplies, equipment and computers, as well as rent space and hire accountants.  These multiplier effects are not included in the above estimate. ..."

"... to keep big companies from avoiding capital gains taxes by owning parts of the new firms and existing businesses from transferring assets to new ones"  He doesn't explain this part, just needs some regulations.

"... allow new start-ups in designated inner city minority or poverty areas to pay zero capital gains tax on any business interest the founding owners sell in their first 10 years. ..."  Reduce unemployment and crime rate in inner city areas sounds good to me.

These are all his numbers so you would have to check the accuracy.  The $39 billion he does elaborate on a little.  "...$16.25 billion from new firms paying corporate income tax and $22.5 billion from individual taxes. ..."

What do you guys think?  Like I said in the message this is not my idea.