Obama Administration Seeks Economic Advice From Young Entrepreneurs
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Mint‘s founder, Aaron Patzer, was at the White House today to consult with top officials in the Obama administration. Patzer joined the founders of innovative Internet startups including CollegeHumor, Daily Candy, Kiva.org, Threadless, Twitter, and Zappos.com on March 6 for the summit.
Patzer went to the White House with a few ideas on how to revitalize the US economy by better supporting the innovation and productivity of small businesses. Mint has learned a lot through its experience as a fast moving startup in a slow moving economy. Here is some of what he shared with Obama’s economic team today.
Emphasize education
“People have not learned the most basic principles of personal finance: spend less than you earn, invest what you save wisely, and be prepared for the unexpected. The solution to changing the national savings rate, and generating more capital for business formation, is education,” says Patzer. “Ultimately, the subjects we learn in school – math, science, history, social studies – are taught such that we might actually use that knowledge to improve our daily lives. Personal finance is a crucial life skill for every adult that is not being taught, that ought to be required for high school graduation nationwide.”
Encourage innovation
“Starting a business is hard, running it is even harder, and finding the right people is the hardest task of all,” Patzer says. “While the downturn in the economy has meant a flood of resumes for sales, marketing, and general business positions, the engineers, scientists, and researchers who actually make the next innovations possible are still in very short supply.”
Patzer’s recommendation for increasing the supply of technically skilled workers included increasing the quotas for H1B visas.
Reward employees
“One common technique startups use to attract top talent is to offer them equity,” says Patzer, “With equity, employees become an owner and investor in the business. Unfortunately, due to the Alternative Minimum Tax (AMT) rules, whenever this equity appears to increase in value, employees must pay the resulting tax on that increase – even though they often cannot sell that stock.” Employees may end up paying hundreds of thousands of dollars in AMT taxes, only to see their startup ultimately fail before a sale or public offering. Their paper wealth never materialized but their taxes were all too real.
Patzer’s recommendation to the new administration is to eliminate the AMT for full time employees of qualified small businesses. This will allow small businesses to grow more rapidly and lead us out of our current economic crisis more quickly.
Stay tuned for our next Update post covering Aaron Patzer’s recap of the conversations and outcomes of his day at the White House.
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8 Comments so far
leave a commentI agree with many of Aaron’s points, but mostly about education. The value of money and the value of saving are often only learned after it’s too late for some people.
My family has been using Mint.com for over a year and find the tools invaluable for budgeting. Mint is perfect for our lives because we use debit cards for 99% of our purchases, and after only a few weeks of “teaching” mint how to match each purchase – I now can see real time spending trends.
We have a strict budget for expenses, and my wife recently wrote about her experiences with being on a grocery budget and how we have saved 50% over last years expenditures. How do I know that? Mint told me!
http://www.patrickkaine.com/2009/03/finding-ways-to-save-money-at-grocery.html
Wow! Go mint and go Aaron! Looking forward to the coming updates.
All great points, but does anyone else find it odd that Obama consults with a business that has yet to make any money?
I agree with most of the points made as well. However, AMT exclusion should only be available to non-officer level employees.
I also whole heartedly agree with teaching basic personal finance in high school. Perhaps I’m biased because I have a personal finance degree, but it is a very important life skill that many don’t have.
Heck, even at my university they don’t require a personal finance class in their GED courses. If you’re to provide a “well-rounded” education, do we really need another art or English class? Basic personal finance should be part of that well-rounded education, it’ll teach a person way more about life than how to draw with colored pencils. No offense to art and humanities here, but personal finance is more practical.
Too many highschool students head off to college where for the first time they have freedom. They also have credit card companies throwing their cards and free cash at them at these universities. Many also have to get jobs and pay bills for the first time. Yet, a majority of them have never balanced a checkbook let alone set a budget or know the dangers of racking up credit card debt.
Personal financial education should be required in highschool just as math and science are. Personal finance will teach a person much more life lessons which will help them for a long time to come. Heck, if you asked I”m sure many financial planners would volunteer their time to talk to highschool kids about personal finance.
/rant
I don’t see how increasing the HB1 visa’s will help the economy when home grown IT talent is being hit with the economic downturn.
“does anyone else find it odd that Obama consults with a business that has yet to make any money”
Not at all. Obama has made it pretty clear that he consults with a very wide range of people and organizations.
I think you made some good points
That’s nice that the Obama Administration invited entrepreneurs and small business owners to receive economic advice. It would be even nicer if the Obama Administration actually listened. I hope the advice given will be advice taken. I’m not holding my breath though.