Monday, March 9, 2009

Responses to Taxes and Entrepreneurship


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.

Another commenter:
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."


Post a Comment

Our Deal

The markets are crashing, thousands of people are losing their jobs and the government keeps funneling money into broken banks. This little blog will help explain why this is happening and how we fix it.

I'd like to preface this experiment with a contract between myself and my readers. My promise to you is that I will be civil, non-ideological, well researched and honest. In return, I only ask that you think.

Send questions to:

Quick Search

Recent Comments