Written by:
Wade Senti

The Future of the Economy

It’s been just over a year since the Obama Administration has taken office – with various agendas for reform on Wall Street and with the Healthcare system, one must ask – what will the cost be to the business community?

The answer is – higher taxes.

One tax, the capital gains tax, is administered based on the individual income tax bracket as well as the length of the given investment. Notably, there are some breaks with certain investment types (i.e. clean energy, environmental).

Since the election, those in business have winced at the idea of an increase in the capital gains tax – citing a disincentive to invest publicly and privately, move real estate, and ultimately – catalyze economic growth.

The real question is – how will this, a tax increase, affect small businesses, which comprise almost half of the US GDP and approximately two-thirds of all US jobs. With unemployment at a national rate well above ten percent, it is justifiable to question where the current economic and social policies are headed.

Partisan rhetoric aside, some initiatives must be pursued including:

A zero capital gains tax for investors funding small businesses

Preference for state and federal grants to small businesses with emerging technologies (not just “shovel ready” projects)

An innovative small business and start-up venture fund through the government - but ran by successful entrepreneurs (applicants must apply and justify economic and social relevance)

Other incentives including: Economic Development credits for high growth products/industry, R&D tax incentives, grants for cost sharing Intellectual Property protection (patents), low interest capital equipment programs, and university/government labs support for product testing/validation

Ultimately, regardless of growth figures or projections, in 2008 a reset took place. Business and industry have changed – the old ways will continue to be ineffective, inefficient, and socially impracticable for the remainder of the 21st century. If the government is to continue its involvement – it must weigh all interests with unbridled objectivity and a long-term vantage point. Thanks to Fotopedia for the photo.