LEVERAGING THE FEDERAL
TAX CODE TO PROMOTE
SELF-EMPLOYMENT AND STATE
AND LOCAL JOB CREATION
Bill Schweke, Senior Fellow, CFED
Big Ideas on Job Creation Conference
June 16-17, 2011
Purpose
Use the federal tax code to deliver essential
business development and financial services to
low-income and other startup entrepreneurs,
with the aims of simultaneously creating more
new jobs and improving service delivery.
www.cfed.org
202.408.9788
US Economic Situation
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Massive job losses
Weak recovery
Deep political and policy divisions
www.cfed.org
202.408.9788
Policy Parameters
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Bi-partisan appeal
Private sector involvement
Help small business if possible
Not too capital intensive
Not too complex administratively
Quick results
Leverage financial and in-kind resources
Scalable
Minimize government costs
Rely on state and local implementation
www.cfed.org
202.408.9788
Key Features of Our Approach
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Focus on self-employed (especially startups and
first time tax filers)
Target tax time and existing tax prep
infrastructure
Use Schedule C and EITC
Minimize direct spending/maximize off-budget
Encourage tax compliance
Develop referral system
Help exit informal economy
Improve capital base, “draw,” and management
skills and understanding
www.cfed.org
202.408.9788
Self-Employment: Its Importance
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Size and diversity
Political
Entrepreneurship: opportunity and barriers
Small business and microenterprise support
system and programs
VITA and other sites
www.cfed.org
202.408.9788
Some Criticisms and Concerns
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Is it high road?
Objections
Counter-arguments
www.cfed.org
202.408.9788
Tax Barriers to Self-Employment
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Schedule C
Numbers
Tax liabilities
Fairness
Need for TA
How to scale up services
www.cfed.org
202.408.9788
Self Employment Tax
Initiative (SETI)
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Goals
Partners
How SETI works
Models
Findings
Lessons
www.cfed.org
202.408.9788
Reforms
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State
Federal
www.cfed.org
202.408.9788
Questions?
Contact: Bill Schweke, bschweke@cfed.org