Finally, a proposal that backs up claims the rich actually invest in small businesses. A report released today by the Ewing Marion Kauffman Foundation, out of Kansas City, Mo., suggests an Obama administration backed extension of a 100 percent exclusion from capital gains taxes for five-year investments in startups could produce $750 million a year to finance new small businesses.
“The administration has proposed making permanent the 100 percent exclusion for investments in C corporations held for at least five years,” said Kauffman Foundation vice president Robert Litan, a co-author of the report. “Making this exemption permanent would generate, conservatively, $7.5 billion in additional investment over a 10-year period in startups, which contribute the vast majority of net new jobs created in the U.S. economy.”
Kauffman senior researcher Alicia Robb, also an author of the report, said, “Young companies — those five years old or younger — accounted for virtually all net job growth from the late 1970s until the Great Recession. Measures that would channel substantially more investment in startups should lead to the launch of more high-growth firms and boost the odds that they will reach the growth phase and create jobs that will support economic recovery.”
The conservative Kauffman Foundation supporting an administration proposal to help small businesses suggests a bipartisan path toward significant tax legislation that could be accomplished even during this election year. For the full report click here.