Inside the Beltway, conventional wisdom says that Congress does little during an election year. But Americans are eager to see Congress address our country’s challenges — most important, the economy and job creation.
We are introducing bipartisan legislation, Startup Act 2.0 on Tuesday — to help jump-start the economy through the creation and growth of new businesses. We want to prove the critics wrong: Congress can get something done in an election year when we work together to strengthen the economy and create jobs.
Companies less than five years old have created nearly all net new U.S. jobs for almost three decades, according to Kauffman Foundation research, averaging roughly 3 million each year. Passing the JOBS Act in March was good news for the young companies now creating jobs. But entrepreneurs face additional challenges beyond access to capital. Startup Act 2.0 picks up where the JOBS Act left off — by helping entrepreneurs to succeed.
Vital to any new business are the talented individuals who turn ideas into reality — including foreign-born entrepreneurs. More than a quarter of technology and engineering companies created in the U.S. between 1995 and 2005 had at least one key founder who was foreign-born, according to researchers at Duke and at the University of California, Berkeley. Yet current immigration policies have hurt U.S. efforts to compete in the global contest for entrepreneurial talent.
Startup Act 2.0 creates an Entrepreneur’s Visa for legal immigrants, so they can remain in the U.S., where their talent and ideas can fuel growth and create American jobs. It also creates a new STEM visa so that U.S.-educated foreign students who graduate with a master’s or a doctorate in science, technology, engineering or mathematics can receive a green card and stay in this country, launch businesses and create jobs.
Our plan also eliminates the per-country caps for employment-based immigrant visas — which hinder U.S. employers from recruiting the top-tier talent they need to succeed. U.S. future economic competitiveness depends on our winning the global battle for talent.
Another significant challenge facing startups is gaining access to enough capital to get off the ground. So our plan provides incentives to encourage investment in startup companies.
Startup Act 2.0 will make permanent the exemption of capital gains taxes on the sale of certain small-business stock held for at least five years — so investors can provide financial stability at a critical juncture of firm growth. Our plan also creates a targeted research and development tax credit for young startups less than five years old and with less than $5 million in annual receipts. This research and development credit is designed to allow startups to offset employee taxes – freeing up resources to help these young companies expand and create jobs.
