

Stimulus for Startups: Some Thoughts From a Seattle Startup Attorney - joewallin
http://www.startupcompanylawblog.com/2010/09/articles/federal-law-regulation/stimulus-for-startups-some-thoughts-from-a-seattle-startup-attorney/

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cperciva
Quoth the article: _I think that investors in companies ought to be able to
obtain a full and immediate tax credit for the entire amount of their
investment to the extent that the funds are used to employ people. This would
cost the Treasury (because, for example, an investor's tax bill would be
reduced by the amount of a $100,000 investment by $100,000, and the payroll
taxes collected on $100,000 paid in wages would be less than $100,000), but I
think it would be a simple and wonderful way to encourage direct investments
into companies and create jobs._

Am I misunderstanding this, or is it really as loony as I think it is? He
seems to be saying that if I would have a $100k tax bill, I can decide to hire
my brother to weave baskets and pay him $100k instead of paying it to the
government.

Aside from supporting nepotism, how is this any different from the government
hiring people to weave baskets?

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joewallin
cperciva--we can disagree, and you can think that what the govt is doing or
has done in the past is great...but it is not working. we need to try
something different. as long as the money is used to employ people...why
should the govt care? it will get its payroll tax dollars from your brother
weaving baskets...

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cperciva
_as long as the money is used to employ people...why should the govt care?_

Because the government could employ someone to do something useful. Pay them
to build bridges. Or to repair hurricane-damaged homes. Or to write open
source software. Or heck, pay them to run around in circles and burn off some
of the famous American obesity.

I don't know what the _best_ thing to pay people to do is, but I'm sure
there's _something_ useful the government could do if it's paying people
anyway...

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joewallin
yeah...my hunch is that if you are going to invest money in a company, you
don't want to waste your investment on a basket weaving business...you would
pay someone to code something cool....

