Baldwin pitches bigger startup tax deduction to entrepreneurs
Pitching legislation that would increase a tax deduction for business startups fourfold, U.S. Sen. Tammy Baldwin was in Milwaukee on Saturday to meet with a group of entrepreneurs.
Baldwin, a Democrat who faces reelection next year, met with small-business leaders at gener8tor, a program that supports the growth of companies through mentoring, connections to investors and technologists.
Gener8tor also operates programs in Minneapolis and Madison. It’s ranked among the top 16 accelerator programs in the U.S. by the Seed Accelerator Rankings project.
Baldwin discussed legislation she introduced Thursday that would increase the startup tax deduction for new small businesses from the current $5,000 to $20,000, allowing business owners to put money back into their companies sooner.
The deduction’s phaseout threshold would be raised from $50,000 to $120,000. Also, the current startup tax deduction would be extended to include organizational expenditures, whether a business is organized as a partnership or corporation.
Baldwin said her legislation, named the “Support Our Start-Ups Act” is aimed at helping businesses as they are getting started.
“It takes an upfront investment for all sorts of things before you can open the doors and start selling your product or providing a service,” she said.
“Right now there’s a very limited tax deduction, so the incentive isn’t as strong as it could be.”
The legislation comes as Republicans in Congress are tackling an ambitious overhaul of the nation’s tax system that would deeply cut levies for corporations and double the standard deduction used by most average Americans.
“The easier we can make it for entrepreneurs to create startups and succeed, the better,” Joe Kirgues, co-founder of gener8tor, said in support of Baldwin’s legislation.
Baldwin referenced a report from the Ewing Marion Kauffman Foundation that for the third year running ranked Wisconsin 50th among 50 states in startup activity.
Not only was Wisconsin last; the gap between Wisconsin and the next lowest states widened significantly from 2016 and 2015. Among large metropolitan areas, Milwaukee ranked second to last, ahead of Pittsburgh.
“We hate that low ranking,” Baldwin said.
Earlier, Gov. Scott Walker’s office said the Kauffman report was not a comprehensive analysis and that it failed to include data such as wages, employment, industry and the long-term success of startups in each state.
“Senator Baldwin has lost all credibility on any sort of tax plan after voting more than 400 times in favor of higher taxes and fees — including a vote against a tax cut for Wisconsin small businesses,” Alec Zimmerman, communications director for the Republican Party of Wisconsin, said Saturday.