Spurring Innovation, Entrepreneurship, Economic Development, et al.
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So, I’ve been thinking a lot about how to get people fired up about entrepreneurship and innovation. Both usually lead to bigger and better things, like economic development. We could use a lot more of that these days.
I’ve also been studying tax rates (I know, what can I say? I like pain!) North Dakota, for example, has one of the lowest rates of unemployment (at least as of Oct 2009 it did), and has a tiered structure for corporate taxation based upon income. Indiana’s corporate tax rate is, from my understanding, a flat 8.5% rate, which is relatively high compared to other states.
Furthermore, US corporations pay some of the highest taxes in the world relative to other countries. Conversely, Irish and Hungarian companies pay some of the lowest corporate taxes. However, one seemingly would think Ireland is still booming, when in fact it is not. I’m not sure how to explain that, other than to say it takes more than just decent tax rates to get peeps fired up about economic development and creating new stuff.
Instead of the federal govt bailing out big, bad behavior in corporations in the US - why not let the smaller start up businesses (the ones that REALLY need the capital) keep a higher percentage of their income? Like, ALL of it? What if start ups or small businesses could keep all of their income up to a certain level, say, $100K for the first year? That way, instead of bailing out bad behavior, we are rewarding good, innovative, daring, and entrepreneurial behavior. Maybe that in turn would inspire others to start their own endeavors, instead of waiting for someone else to create a job for them, which, by the way, people are really playing Russian Roulette with, as the person who can best define what type of work s/he wants to do is the individual, not someone else.
Last but not least, what if the state government could actually find ways to generate revenue without taxing its corporations and people? The toll road example in Indiana is a good one, and I’ve ranted about this before. Government, just because it is government, doesn’t mean its employees should check their innovative, creative minds at the door.
If we as business owners–the bold, daring and slightly crazy–have to be sustainable or die, shouldn’t our government be held to that same (or an even higher) standard?
Posted on: Wednesday, January 27, 2010 at 1:20 pm 
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