How about this: let's let the states decide how much to tax gains from startup companies. Then we could see if the states that don't tax startups have a boom in startup companies and economic growth, while states that tax startups don't.
Hey, we already do this: some states have corporate income tax, and some don't, and guess which states have more corporations registered?
If you break people into groups and say that group A won't have to pay taxes on startup company gains but group B does, then group A gets a significant economic advantage over group B which wouldn't exist if you weren't doing the test. You're discriminating against group B and if the test goes on long enough to produce results, you've probably given group A a permanent unjust advantage.
Well I lived in Delaware for 4 years, and sure a lot of companies are on paper headquartered there, but those companies are not actually there. Basically Delaware's economy is DuPont, Gore, and a bunch of financial companies. But my startup is "based" in Delaware even though not one of us still lives there. So that argument is really irrelevant.
I don't think breaking people into groups is a good idea either. I just think extrapolating from states to national policy might be a bad idea. I'm against higher taxes, but if you look at states with high taxes vs low taxes, the logical conclusion would be higher taxes. Why? Because NY, CT, CA, NJ, and MA have really high taxes but also really strong economies. Manhattan has high income, sales, and property tax, along with super high tolls and everything else, and it is one of the richest places in the country.
You can't recreate that in the middle of a tax haven even if you wanted to. At some point you make enough money that you'd rather live in downtown Manhattan and pay an extra 5% of your income in taxes than give up what you like about living in Manhattan to save 5%.
Hey, we already do this: some states have corporate income tax, and some don't, and guess which states have more corporations registered?
If you break people into groups and say that group A won't have to pay taxes on startup company gains but group B does, then group A gets a significant economic advantage over group B which wouldn't exist if you weren't doing the test. You're discriminating against group B and if the test goes on long enough to produce results, you've probably given group A a permanent unjust advantage.