The New York Times -- that's right, the New York Times -- credits tax cuts for fueling the entrepreneurial economy in Ireland:
Government help for Irish entrepreneurs grew out of an overall economic policy devised in 1987 that reduced personal taxes, said Kevin Sherry, a director of Enterprise Ireland who specializes in start-up companies.
Sadly, we seem to have forgotten this lesson in the US. The Democrats have resurrected the politics of envy, harking any number of tax increase schemes. At the same time our Republican President offers us only a one time tax rebate as a feeble attempt to stimulate the economy.
(Thanks to Ben Cunningham for passing this story along).
I was hoping you would see this article and comment on it.
Maybe one day we'll have Americans emigrating to Ireland for a better life!
That would be something, wouldn't it?
There are a couple of things going on here. There are numerous elements that support an entrepreneurial culture, and it is significantly broader than just tax rates. All of the following are critical:
1. a belief that failure is not the end of the world -- I don't know much about Ireland, but the U.S. has actually undermined this idea by "reforming" bankruptcy laws making it harder for entrepreneurs to make a fresh start, and by adopting a health care system with significant penalties for dropping out for even short periods (pre-existing condition exclusions, neutron bomb provisions, etc.).
2. A critical mass of well-educated potential entrepreneurs-- Don't overlook the fact pointed out in the article that the government "made all education free through the university level." The best ideas come out of universities, and areas with large numbers of universities for a reason.
3. Business-friendly environment -- This is where you plug in matters such as relatively low tax rates or a legal system sensitive to the needs of small businesses (fast, efficient). But in the real world, items 1 and 2 are more important.
From my personal experience in entrepreneurship, I can assure you that two of my biggest hesitations related to accessing good health insurance (mainly for the wife and kids), and a concern that failure would cripple my family's finances for more than a decade. I've had some success, but we shouldn't overlook the importance of public policy mitigating the downside risks as one of the most significant factors in promoting an entrepreneurial culture.