The start-up industry is gaining political momentum. When start-ups protested a German proposal to eliminate tax breaks for capital gains that were re-invested into new projects, politicians of the government coalition and the opposition stood side by side and voiced their support for the start-up industry. I talked to several politicians about the issue. Here’s what they had to say:
Thomas Jarzombek, a conservative member of parliament, was most explicit: “I regard the proposal as a very bad idea. We’re working hard to improve conditions for start-up companies in Germany, and we cannot afford such counterproductive humbug.”
According to Johannes Vogel of the Liberal Party, Germany should exploit that fact that other European countries have higher capital gains taxes: “The lower tax rate is seen as a problem, not the higher rate. That is bizarre: If you are concerned about tax discrimination, it would be simple to lower the tax rates for everyone.” In other words: investors from other countries would enjoy the same tax breaks as German investors.
Lars Klingbeil, responsible for the creative industries within the Social Democratic caucus, takes a wide view: “I advocate for a policy that uses the decision of the European Court – which sparked the recent policy proposal – to create incentives for foreign investors, founders, and business angels to invest in German companies. This is in the interest of Germany as a country of economic success and innovation, and will also help to create new jobs.”
On this issue, conservatives agree: they, too, believe that tax breaks for start-ups will lead to the creation of new jobs. “In a climate of global competition, one thing is clear: New jobs are only created under the right conditions. We must not inhibit the ability of young and creative entrepreneurs to found companies. Performance must not be punished if we want to cultivate young professionals and help young companies to succeed and grow.” These are the words of Dorothee Bär, another conservative parliamentarian.
These reactions are one side of the feedback I have received. But politicians also say that they want the start-up industry to make its voice heard. Klingbeil, again: “Many of us are not aware of the challenges of founding and financing an internet business. Many of us don’t know that young founders are reliant on the work of business angels because no other funding options exist in the beginning. It is thus important to make the peculiarities and special challenges of the start-up industry part of political discussions. Young entrepreneurs must insist on this point. We have to prevent a situation where the culture of innovation becomes sidelined in Germany.”
Many initiatives that are currently under way aim at precisely that: to create an association of start-up representatives that can play a political role. It isn’t necessarily a negative development that several initiatives compete with one another: a diversity of proposals can only help us to strengthen our political profile.
Politicians must do their homework as well, argues Peter Tauber, another conservative politician: “My impression is that the different phases of entrepreneurialism imply different challenges – from the articulation of a business plan to the hiring of domestic and international employees, to the generation of joint venture capital. We are aware of that, but politics has not yet fully engaged with the requirements and necessities of start-ups.”
Word on the street is that Chancellor Merkel wants to increase her engagement with the start-up industry. It would be good if we could welcome her to a setting where our industry speaks with one voice in future discussions.
Newconomy is the new weekly column for the start-up industry. It focuses on the intersection of classical and new economies and of politics and entrepreneurialism. Newconomy is sponsored by Factory, the new start-up hub in Berlin.
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