Friday, November 27, 2009

Tax break on profits again in jeopardy - The Boston Globe

Interesting headline on the front page of today's Boston Globe (Tax break on profits again in jeapordy). What reasonable justification is there for treating the investments by some few in the potential of someone else's ideas to provide a handsome return-on-investment as different and better than the investments of entrepreneurs in their own creations? Why is that tax incentives go to hedge fund managers, and venture capitalists, and angel investors, but not directly to the entrepreneurs themselves who invest not only sweat equity but often stake their own savings and the safety of their families?

What is the motivation behind such tax incentives? The argument in their favor is that "raising taxes on investment" will "weaken the economy". But how? Look at yesterday's post, and the opinion piece by Josh Kosman. Are hedge fund and VC investments really benefiting the economy at large? That's quite a debatable point.

Perhaps we should look at the sustainable and broad benefits of an entrepreneurial economy, about the benefits that accrue from seeding innovation at the earliest stages, and supporting research entrepreneurs in pursuing and maintaining their passions for bettering society. Perhaps by focusing our energies and tax incentives on these individuals themselves instead, we'll more likely strenghten the economy!

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1 comment:

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