A former colleague, who lives and works in New York City, forwarded to me information on the START-UP NY Tax Incentive Initiative. (The program was detailed in his accountant’s newsletter.) This program is enough to make me think about moving back to New York City. Basically, with certain provisions and restrictions, any college can establish a ‘zone’: Baruch College, CUNY, here I come! Cooper Union has a second chance!
Tax-Free: Participating companies in START-UP NY will not pay any taxes (e.g. business/corporate taxes, sales taxes and property taxes) for 10 years. Employees in participating companies will pay no income taxes for the first five years. For the second five years, employees will pay no taxes on income up to $200,000 of wages for individuals, $250,000 for a head of household, and $300,000 for taxpayers filing a joint return. The number of net new jobs eligible for personal income tax benefits will not exceed 10,000 new jobs per year.
- No corporate income tax on business income;
- No personal income tax on business income;
- No sales and use taxes on personal tangible property and services purchased by businesses;
- No real property taxes due on property owned by a college or university; and
- No MCTMT (MTA Payroll Tax)
I’ll bet that David Karp is totally miffed that he started Tumblr now and not then! He would have avoided a paying a portion of his taxes, and his company could have raised less capital. Tumblr would have the option to pay its employees an after-tax income, and trade the delta for stock. Of course, there are still Federal taxes; NYS taxes, while significant, pale in comparison.
Which brings us to a brilliant thought: What about a START-UP America Tax Incentive Initiative? Would that not be way too cool?!! Think about it: What better way to invigorate and rebuild Detroit, and other incredibly poor, destitute areas around the United States.
What are the 10 poorest States in the United States?
Do any of these States surprise you? Arkansas is the home of Wal-Mart and Bill Clinton; Tennessee is the home of Oak Ridge National Labs; and North Carolina, a retirement mecca, is the home of Duke University, Wake Forest and University of North Carolina-Chapel Hill. There are economically dis-advantaged areas throughout our country that would benefit enormously from this sort of a lift.
Let your imagination run wild: Semiconductor factories in Louisiana? Huge software companies headquartered in Detroit? Internet giants in Tennessee? The possibilities are endless.
How about one zone per state? Two or more zones for the poorest states, and impoverished areas?
This is a worth experiment where we have everything to gain. What do you think? Where, geographically, would you start? How would you roll the program out?