Hello,
I have spent a significant portion of this week going over Governor Walker's budget proposal as I feel the current course of politics in your state will have an impact on the entire nation. Recently I have been researching angel investment tax credits in relation to the Governor's proposal to include tax option corporations in these tax credits and make this move retroactive to Dec. 31, 2007. I find issue with tax credits that are issued to investor's for business development that has occurred up to three years ago. Is this not a benefit only to the venture capitalist as these start-ups have already received investor dollars and any job creation has already happened? In my research I came across more than a few references to Ohio, including one from your paper's editorial.
I have just begun to research Ohio's Third Frontier Program, but a comprehensive approach to business development such as this seems a far more viable tool. The $700 million bond issue for the continuation of Ohio's Third Frontier Program was passed by a wide margin in 2010. SRI International and Georgia Tech did a comprehensive study of the Third Frontier Program which I am still investigating. Angel investment tax credits may not be a bad thing, however a realistic approach to promoting growth in a state's economy should use this as one of many resources.
I hope that your newspaper is making an effort to inform the public as to details of this budget proposal in a manner reflecting the intelligence of the citizens of Wisconsin. I find so many single sentence statements in various media outlets as to specific legislation with little interpretation or detailed information. I would love to hear any news that you may have in relation to this budget proposal. Thank you for your consideration.
Here is some additional information on angel investing and Ohio's Third Frontier Program in Response to some comments:
Hey thanks for your interest and your insight Matthew, it is much appreciated. Since my reply to your comment I have been researching the programs that have been in Ohio for almost a decade. Their Third Frontier Program could well be a model for business investment in many states.
I firmly agree with you that tax dollars are needed to support business development and growth, I am only questioning the methods. Investor tax credits are part of the Ohio program but they have implemented a far more comprehensive approach which provides grant money directly to developing businesses in the initial and growth phases. I have not yet studied in depth the report by SRI International and Georgia Tech regarding the Ohio program but I am sure that if you check it out you could provide valuable insight into the nuances. Perhaps your state (Pennsylvania?) ought to look into a model such as this. What I have read tells me that this program has greatly helped to transform Ohio's economy from one of manufacturing to attracting more high tech related jobs. They have received just under $10 in return for every dollar spent. 41,300 jobs were created through this program with an average salary of about $58,000 per job. Last year Ohio passed a $700 million bond issue in a public vote with bipartisan support to keep this program moving forward.
Angel investors are a much needed part of this economy as venture capitalists become more risk averse and are trending towards investing in more established businesses. Tax credits for these investors are not necessarily bad since the business and most of the time the investor are within the given states. There needs to be more done to directly provide developing businesses with funds at the seed stages. Capital gains tax breaks would seem to benefit a more established business. An article addressing federal tax credits for angel investors poses some interesting questions regarding the viability of these tax credits in general.
I would be surprised if your state does not have programs which connect angel investors with developing businesses such as your friend's. I have been saving most links that I find useful and would be happy to share them with you. I also found an article today in The Nation regarding national debt and some misconceptions as seen by the author William Mitchell. Good food for thought, you can find a link to the article at the bottom of my blog. Thanks again for your input, it is always appreciated, peace.
No comments:
Post a Comment