Tags: Hill | Taxes | Seed | Capital

Michael Hill: Cut Taxes Now on Seed Capital

By    |   Wednesday, 04 Jan 2012 02:56 PM

Washington politicians need to focus on cutting taxes on seed money that funds entrepreneurial start-ups and less on arguing over who gets taxed and how much, says venture capitalist and author Michael Hill.

"It really doesn't accomplish anything to simply raise taxes. What we need to do is just target the benefits and incentives to those who create jobs," Hill tells Newsmax.TV in an exclusive video interview.

"We don't want to make the mistake of getting into these binary arguments that in the end go nowhere but focus more specifically on who really are our job creators and how can we incent them and how can we give them the tax benefits that they really need without getting into some rhetorical argument," says Hill.

Story continues below video.





In other words, focus less on Warren Buffett's calls for tax hikes on the wealthy and more on doing whatever it takes to cultivate jobs where they are needed the most — in small business.

"One thing that we should do is get rid of capital gains taxes altogether on seed-stage investment. That really would be an outstanding tax policy because it would drive money in the direction that is truly most effective for creating jobs," Hill says.

Drastic changes to monetary policy might not be the answer, says Hill, president of NLS Ventures, a company that facilitates the creation of new businesses and author of "Cannibal Capitalism."
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Calls for a return to the gold standard have risen within the past year in response to the Federal Reserve's loose monetary policies such as quantitative easing, which are asset purchases from banks designed to fuel growth and job creation.

Such policies also threaten to push up inflation rates, which the gold standard would make virtually impossible by attaching the value of the greenback to gold.

The downside to such policy might negate the good, Hill points out.

"Ultimately if we were to choke our money supply by tying it to something that can't grow, that can't expand, in the end we would inhibit the growth potential of the country," he says.

"Ultimately, money is designed and minted to facilitate commerce, to facilitate the exchange of goods and services."

There's probably nothing that the U.S. government can do to shield the economy from a European meltdown, either.

The Federal Reserve, for example, say it wants banks to set aside more capital in compliance with international standards, which would cushion them from shocks from abroad.

Preventative medicine is fine, but steps to develop small business is more important.

"If we return to the home game and focus on developing our inside infrastructure, our inside business capacity, and our inside wealth creation, then ultimately we are going to see what we are looking for and ultimately come away stronger that the rest of the world, stronger than Europe and many of the risks that we now face will simply be mitigated."

Editor’s note: To order ‘Cannibal Capitalism' at a great price — Click Here Now.

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