We had quite a large response to the taxes and entrepreneurship post today, which led to a lot of new visitors courtesy of Andrew Sullivan. Welcome, and I hope you continue to read and interact with the site.
There are some great comments in the comment section, and I want to highlight a couple:
It's interesting that you include 1992 as Clinton year, when he wasn't President, and 2000 as a Bush year, when he wasn't President. If you start with 1993 and 2001 respectively, and take the 5 Bush years which appear on your graph and the first 5 Clinton years, you will see substantially greater new business growth during the Bush years.
Actually I included the correct data from the correct years, but you pointed out something that wasn't exactly clear on the charts. Each X-axis label was the end of a year, not the beginning. So the space between 2000 and 2001 is actually end year 2000 to end year 2001. Thanks for pointing that out and I clarified the labels in the original post.
I have started 3 and sold 2 software businesses. Current tax rates had zero impact on my decision making process. Far more important: Could the business succeed, did I have a realistic chance of selling our services/products, was I willing to make the commitment in time/effort/money to make it successful, was there an achievable endgame? A few percentage points of tax rate really only drove what I took home as profit - with the higher rate, I would, as a commenter said above, look to ways to reinvest in the business instead of taking home everything.
And finally, from another commenter:
Mark Cuban had a good post about this a while back, the line that jumps out at me:
"Entrepreneurs live to be entrepreneurs. I have never had a discussion with anyone about starting a business that included tax rates. Ever. If anyone that wanted an investment from me made a point of discussing tax rates as an impact on their business, I wouldn't invest in them. Ever."