CPA Claims to Have a Better Tax Incentive Program to Help Small Businesses Raise Capital
And it is 'Far More Effective Than Anything' He Has Seen Coming from Washington, D.C.
August 23, 2011 (PRNewswire) CPA Harvey A. Goldstein says "using capital gain benefits, employment incentives and providing capital to banks is nonsense in helping small businesses in raising capital and increasing employment."
Goldstein peels away at each of the incentives that members of Congress have proposed to assist small business. Goldstein states, "I've never seen anybody, in 40+ years as a practicing CPA, invest in a small business because somewhere off in the distant future they may have a capital gain."
Goldstein continues, "Employment tax incentives might help a bit but give a small business person a $5,000 tax credit to hire a $25,000 employee will never work. Where will they get the extra $20,000?
"I know everyone is criticizing the banks for not loaning to small companies. How can you blame them? A business person walks into the bank, shows the banker a financial statement that has a decline in sales and cash flow, an increase in accounts receivable and a business that is squeezed for cash so it can't meet its debt obligations. What banker would loan to a business in decline? None that I know of.
"So here's my idea. We should provide private individuals who would like to invest in small businesses a tax incentive immediately upon making the investment. This would not require a government bailout for small businesses but would allow the marketplace to determine which businesses people will invest in. The tax incentive would be icing on the cake. The problems with the items that are being proposed by members of the Congress are either delayed incentives or programs that are only partial incentives and require cash flow to take advantage of the incentive."
When asked how much will it cost the taxpayers Goldstein states, "Let us assume for the moment that enough people take advantage of my proposal and it would cost the treasury $1 billion in lost tax revenue. In order for the Treasury Department to lose $1 billion with my incentive program it would take $3-$4 billion being invested directly into small businesses. A $3-$4 billion direct investment in small businesses in today's economic environment would produce tremendous results economically and the Treasury would be adequately reimbursed through the expansion of business provided by this program." Goldstein continues, "If investors don't take advantage of the program we will be exactly in the same place we are today. Cost to Treasury - nothing."