Monday, October 18

Entrepreneurship seen to reduce poverty

Goldwater Institute:

To help reduce poverty, policymakers should focus on increasing the number of entrepreneurs in their state. Research shows that one of the most effective ways to increase entrepreneurship is by lowering tax burdens. In particular, this study shows that high tax burdens, measured as a percentage of personal income, drags down the growth rate of entrepreneurship in a state: for every 1 percentage point increase in the tax burden, there’s a corresponding 1 percentage point drop in the entrepreneurship rate. States without income taxes also have higher average rates of entrepreneurship than those with income taxes. …

Pulling out all the stops to increase the rate of entrepreneurship should be a top priority for policymakers.

More at Increasing Entrepreneurship is a Key to Lowering Poverty Rates.

Of note: The income tax reform at the state level will help Kansas entrepreneurs, but the economic development policies used by most local governments are targeted towards large established companies. These policies cause increased tax costs on other firms, especially entrepreneurial ventures.