Monday, January 31, 2011

Obama Proposes Tax Relief, Credits To Spur Startups

President Obama is proposing to permanently eliminate capital gains taxes on key investments in small businesses, as part of the administration's "Startup America" initiative, announced this morning. According to the White House, the President's new budget proposes making permanent the elimination of capital gains taxes on key investments in small businesses, which was passed as a temporary provision in 2010 as part of the Small Business Jobs Act. In addition, the White House said it is proposing and expansion of the New Markets Tax Credit to encourage private sector investment in startups and small businesses operating in lower-income communities. The new effort also will direct $2B in guarantee authority over the next five years to match private sector investment funding through the Small Business Investment Company (SBIC) program. The various moves are tied into the launch of the "Startup America" initiative by the administration, headed by AOL co-founder Steve Case. That effort is aimed at spurring entrepreneurship and funding for startups. The launch of the effort follows Obama's State of the Union Address, where he talked about out-innovating, out-educating, and out-building the rest of the world by spurring entrepreneurship across the country.