The higher tax rates from Obamanomics could have a definite restraining effect on entreprenuership says James Manzi as well as Nobel laureate Edmund Phelps. Manzi concludes…
The concept of “animal spirits” recognizes that not all economic decisions are made entirely with spreadsheets. Some people start companies because they’re driven by a dream that transcends rational economic calculation. But most successful entrepreneurs are pretty serious about comparing risks with opportunities. Higher tax burdens raise the price of entrepreneurship. When you raise the price of something, then, all else held equal, you usually get less of it. Given that something like 7 million people in the U.S. work in companies that are or were venture-backed, including a majority of the employees in high-growth sectors of the economy like computers and software, this is likely to matter a lot in the long run.
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