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To Fix Economy, Fix Everything Else

by Thomas MacMillan | Jan 21, 2014 1:31 pm

(6) Comments | Commenting has been closed | E-mail the Author

Posted to: Business/ Economic Development

Thomas MacMillan Photo In town to talk about “angel” investing, U.S. Sen Chris Murphy sparked a conversation about other ways to help Connecticut’s economy—like fixing immigration laws and teaching 9-year-olds to code software.

Those suggestions came out during a square-table discussion at the Grove co-working space on Chapel Street.

Dozens of entrepreneurs and players in the state’s startup scene sat down to talk with Sen. Murphy (pictured) about how the federal government can assist Connecticut’s tech sector. Murphy was joined by U.S. Sen. Dick Blumenthal, U.S. Rep. Rosa DeLauro, and state Rep. Gary Holder-Winfield.

Murphy started the conversation by announcing his proposal for a federal Angel Investor Tax Credit, to create an incentive for investors to support young startups.

Connecticut startups often don’t stay in the state, because it doesn’t have a “culture” that supports entrepreneurs. That’s changing, thanks to places like the Grove, which are building that culture, Murphy said.

“At the federal level we can do more,” Murphy said.

He laid out two proposals he’s working on. The first is a “targeted fix” to the American Jobs Act, to allow for less “onerous” accreditation of angel investors.

The second is a tax credit for angel investors, modeled after an existing Connecticut program. Angel investors would receive tax credits of 25 percent off of qualified investments, up to $250,000.

Murphy acknowledged that it’s a “tough time to pass new tax credits.”

Inequality

“Here in Connecticut, you are our economic salvation,” Murphy said to the room of techies. Manufacturing is down to only 10 percent of the economy. The states future is tied up in “high tech.”

“You are the job creators,” said Blumenthal (pictured). “We don’t have gold mines or oil wells. What we have is smart people.”

John Seiffer, a business advisor who runs CEO Boot Camp, later took issue with Blumenthal’s statement. Businesses aren’t job creators, he said. That’s a misconception. “Demand creates jobs, not business owners.”

The government can help create demand by reducing economic inequality, Seiffer said. “It’s about creating demand at the middle-class level.”

Tax Code

Seiffer (pictured) said the country needs to simplify the tax code. That’s not to say lower taxes, Seiffer said. Just make it easier for businesses to pay what they owe. He said some businesses pay three times more ensure tax compliance than they do in taxes.

Usually, when people talk about simplify taxes, they want to reduce corporate taxes, Blumenthal said.

That’s not what I mean, Seiffer said. Taxes were even higher under President Bill Clinton, and businesses did great. Businesses don’t worry about the tax level, he said. “That’s not what entrepreneurs think about. They think about, ‘How can I make a profit”’”

Health Care

Seiffer also suggested taking health care out of the equation. Businesses should not have to think about providing health care as part of the profit and loss statements, Seiffer said. The country should move to a single payer system. As it is, American businesses are at a disadvantage compared with international companies who don’t have to worry about health expenses because their countries’ governments provide health care.

U.S. Rep. DeLauro said the Affordable Care Act is a step in the right direction on that front. She urged Seiffer and other members of the business community to speak out about things like health care and income inequality.

Immigration

Kathleen Warner (pictured), another business adviser, said the government could also help business by reforming the immigration system. The economy would be bolstered allowing foreign-born entrepreneurs to stay in the country, she said.

Miles Lasater (pictured), founder of Higher One, called immigration reform the “number-one thing the federal government could do” to help businesses. Immigrants are not taking jobs, he argued; they are creating new businesses.

Seiffer urged the elected officials to reframe the immigration debate. It’s not that immigrants are taking pieces of the pie from people who are born here, he said. “When you bring people in, the pie gets bigger.”

Sen. Blumenthal, in turn, urged entrepreneurs to help with that reframing: “A great failing of the immigration reform process has been the silence of the business community.”

Education

Josh Geballe, CEO of Core Informatics, said the government should focus on education as a long-term support to the economy. He noted that his 9-year-old doesn’t learn how to write in cursive in school. That’s outdated. But what will replace it? Kids like him should learn a modern skill instead, Geballe argued. “Software coding should be a mandatory subject in elementary school.”

“Amen,” said DeLauro (pictured).

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posted by: Threefifths on January 21, 2014  5:33pm

Miles Lasater (pictured), founder of Higher One, called immigration reform the “number-one thing the federal government could do” to help businesses. Immigrants are not taking jobs, he argued; they are creating new businesses.

They are taking Jobs.

H 1B visa racket busted in US, 11 Indians arrested

http://youtu.be/Uaofpy3D-oE

Also if enough people in the U.S. simply bought five percent more American-made products, it would create one million new jobs.Bring the call center jobs back.


Josh Geballe, CEO of Core Informatics, said the government should focus on education as a long-term support to the economy. He noted that his 9-year-old doesn’t learn how to write in cursive in school. That’s outdated. But what will replace it? Kids like him should learn a modern skill instead, Geballe argued. “Software coding should be a mandatory subject in elementary school.”

And Outsourcing of jobs are still going on.You point.

posted by: Christopher Schaefer on January 21, 2014  9:02pm

Sen. Murphy suggests one way to improve CT’s economy is by “teaching 9-year-olds to code software.” Great idea—but don’t you think they first should be able to read, write, and do math fluently?  Oh, right: he’s a careerist politician, so we’re not actually talking about reality. “Connecticut startups often don’t stay in the state, because it doesn’t have a ‘culture’ that supports entrepreneurs.” Translation:  one-party, Democrat-dominated, soon-to-go-bankrupt CT has the most anti-business tax structure in the country.  “He laid out two proposals he’s working on. The first is a ‘targeted fix’ to the American Jobs Act, to allow for less ‘onerous’ accreditation of angel investors”. Translation: investors who donate to the re-election campaigns of Murphy, DeLauro et al will be fast-tracked. More concise translation: we support crony capitalism.  “’Here in Connecticut, you are our economic salvation,’ Murphy said”. Oops! Somebody forgot to tell him this wasn’t a campaign fundraising event.  Blumenthal:  “We don’t have gold mines or oil wells. What we have is smart people.” Well, not THAT smart if they keep re-electing these same crony, careerist politicians year after year—despite CT having one of the worst economies in the nation. And not THAT smart if our senator can’t even grasp basic English grammar: what we have ARE smart people.  Unfortunately, among CT voters this seems not to be the case.

posted by: NewHavenTaxTooHigh on January 22, 2014  12:39am

I provide services to start-ups and believe me the gov’t has done enough already. My health insurance went from $500 a month to $700 a month thanks to Obamacare. I pay $8,400 AND have a deductible of $3,500. Most of the politicians in this article are career politicians and know nothing about the real world business environment. If Murphy and Blumenthal really want to help they ought to just get out of the way.

posted by: Threefifths on January 22, 2014  9:28am

People Have you forgot what this man said.

Giant Sucking Sound - Ross Perot 1992 Presidential Debate.

http://youtu.be/Rkgx1C_S6ls

posted by: John Fitzpatrick on January 22, 2014  1:32pm

As the co-founder of a New Haven-based startup company that has raised investments from angels and continues to seek investments from angels, I’m grateful to Sen. Murphy for proposing this legislation and for Sen. Blumenthal and Rep. DeLauro for supporting it. Getting a new company off the ground is difficult and risky, and investments at an early stage can be what separates the winners from the losers. It’s great to know that I and other startup founders have our Congressional delegation behind us as we work to grow our businesses and thereby create jobs for Connecticut.

posted by: Kip Steele on January 22, 2014  3:24pm

What an awesome event at the Grove. It is great seeing all of the leadership of the private and public sector coming together to have an open discussion and look for answers & solutions to implement. For innovation to occur it has to happen at the beginning of the innovation curve where entire ecosystems can be created http://theory.isthereason.com/wp-content/adopters.gif . If CT is not willing to take a risk, then companies will continue to move out of it or start in other places. NY State is giving away space with no taxes for 10 years!  There is a huge amount of intellectual capital that is lost every year to students moving 2 hours south to NYC or 2 hours East to Boston. New Haven is an ideal environment to reverse this ex-filtration and Miles has built a firm in New Haven .   

Being able to build and create is what has always helped any leading economy maintain that lead and software coding is the new creator paradigm. Any state that wants to succeed has to be at the beginning of the curve. Jobs that are yet to be created on new tech

People that want to come and work for companies that are at the beginning of the curve come from around the WORLD to help build and grow their companies in the US. America wants the best and brightest to come and help build out country. Think about that: leaving your family, friends, food, music, customs to come somewhere entirely foreign to help build something. That is America we all want. Now Talk to anyone that is currently waiting to get a Green Card in the US and you will see a paradox of delay and bureaucracy, especially when you have already allowed people to come to the US to study. 

Again, great seeing Miles, Ben, John, Slate,  and other entrepreneurs in New Haven & CT to show what is happening in state. They could have taken their ideas and their firms anywhere else but they continue to stay in the area because they want to do more than just build a company, they want to have a positive impact on our nation.

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