On May 22, 2012, U.S. Sens. Jerry Moran (R-Kan.), Mark Warner (D-Va.), Marco Rubio (R-Fla.), and Chris Coons (D-Del.) introduced Startup Act 2.0, bipartisan legislation aimed at jumpstarting the economy by helping entrepreneurs succeed. This proposal takes Moran and Warner’s original Startup Act and merges it with Coons and Rubio’s AGREE Act, building upon the foundation of the two previous proposals.
The original Startup Act had five main areas of focus. These were reducing regulatory burdens; attracting business investment; accelerating the commercialization of university research; attracting and retaining entrepreneurial talent; and encouraging pro-growth state and local policies. Startup Act 2.0 takes these focuses and advances them a step further. The purpose of Startup Act 2.0 is to recognize and utilize the contribution that innovators and entrepreneurs make to the U.S. economy, and to provide them with the freedom and means to flourish.
One highlight of the proposed bill is a provision to create new visas for U.S.-educated foreign students who receive a master’s degree or Ph.D. in science, technology, engineering or mathematics in order to keep their talents and knowledge in the United States. It also proposes the creation of an Entrepreneur’s Visa for legal immigrants to allow them to remain in the United States to launch businesses and create jobs, as well as eliminating the per-country caps for employment-based immigration visas.
In addition, the law would create a targeted research and development tax credit for young startups, and make permanent the exemption of capital gains taxes on the sale of startup stock held for over five years. The act also contains provisions to speed up the process of bringing innovative research to the marketplace through federal funding of research and development at universities, and to require the government to conduct a cost-benefit analysis of new rules that would have a significant impact on the economy.
If passed, this act could mean big things for investors and business owners. Section 6 of the Act would make permanent the 100 percent exemption on capital gains taxes for investments held for at least five years in qualified small businesses, creating an incentive for investors to buy into and stay with these smaller businesses and making investors more available to the owners. Section 7 would help small business owners advance by creating a research and development tax credit for startups, providing them with the necessary funds to move forward with their businesses. In addition, business owners would be aided by the additional human resources available to them by the extension of visas to STEM candidates and the advancement made possible by providing federal funding for research and development at American universities.
This plan shows that members of Congress can come together across partisan lines to try to improve the economy, create jobs and attract and acquire the best resources and talent. As Sen. Moran has said, “To get America’s economic engine roaring once again, entrepreneurs – both American and foreign-born – must be free to pursue their ideas, form companies in the United States, and hire employees.”