Jim Pethokoukis has a couple of charts showing a paucity of start-up jobs under President Obama. Here’s one of them.
“Entrepreneurs — and the innovation they generate — are the beating heart of the U.S. economy,” writes Pethokoukis. “But the heart of America’s economy isn’t doing so well these days. In fact, the sorry state of Startup Nation is just another example of how the supposed recovery is anything but.”
So what’s the cause? A report from Tim Kane at the Hudson Institute points to more taxes, more regulations and Obamacare as an explanation for why fewer people are starting businesses these days:
1. At the federal level, high taxes and higher uncertainty about taxes are undoubtedly inhibiting entrepreneurship, but to what degree is unknown.
2. The dominant factor may be new regulations on labor. The passage of the Affordable Care Act is creating a sweeping alteration of the regulatory environment that directly changes how employers engage their workforces, and it will be some time until those changes are understood by employers or scholars.
3. Separately, there has been a federal crackdown since 2009 by the Internal Revenue Service on U.S. employers that hire U.S. workers as independent contractors rather than employees, raising the question of mandatory benefits.
The more we tax, regulate and otherwise burden businesses the fewer businesses, and the less business growth, we’re going to get in return.