Startup Tax Holidays: The Business-Friendly Policy That Pays for Itself

It’s the question on every policymaker’s mind these days: How do we get entrepreneurs to start businesses in our backyard?

Every state, county and city is different, so there’s no magical, one-size-fits-all formula for startup success. But there are some tactics that are broadly applicable to a wide range of situations. One particularly ascendant approach is head-slappingly simple: tax holidays for nascent startups. Done properly, such holidays are highly cost-effective. And they’re great for putting hitherto-unknown startup hubs on the map. Here’s a look at what tax holidays for early-stage companies entail — and how local economies can benefit.

A Clear Competitive Opportunity

State and federal tax laws often favor established firms — a condition often referred to, invariably in a negative sense, as “corporate welfare.”

Despite increasing barriers to entry in many industries, it’s far less common for early-stage companies to get favorable financial treatment. Jurisdictions that buck the trend and favor young, disruptive businesses therefore carve out a slice of the competitive pie for themselves.

One Way to Keep Up With the Joneses

Although economic development isn’t a zero-sum game in which one state’s loss is another’s gain, it’s impossible to ignore the powerful competitive pressures exerted by an increasingly globalized economy. Single jurisdictions that say “enough is enough” and refuse to offer business-friendly incentives might achieve some measure of moral victory, but the cost — measured in lost taxes, fewer jobs and shrinking cities — certainly isn’t worth it.

With this in mind, it’s critical for state incentives to stay ahead of the curve. Tax holidays for young businesses as well as companies that pledge to relocate from out of state have been proven to boost economic performance and lure dynamic firms.

A Revenue-Neutral Proposal

These days, “but how much will it cost?” is an increasingly common political refrain — a latter-day incarnation of “it can’t be done.”

Taxpayers should thank their political leaders for subjecting public-spending and business-incentive proposals to close scrutiny, particularly when public monies are involved. They should also be grateful for leaders who understand the value of public investments and aren’t afraid to make tough choices that take a long view of development and prosperity. That’s why the concept of tax holidays for new or relocated businesses is so attractive: According to economists, the upfront costs of the incentives is often offset — and sometimes surpassed — by income and sales tax receipts attributable to newly created jobs.

Who’s Leading By Example?

The concept of business-friendly tax breaks isn’t new. In fact, incentives for entrepreneurs and small business owners have been around almost as long as the tax code itself. But state and city governments have only recently discovered the power of tax breaks aimed specifically at nascent businesses that pledge to incorporate or headquarter in a particular region. Not surprisingly, some places are farther down this path than others.

Take Massachusetts, long recognized as a hub for high-tech startup activity. Local luminary Chip Flowers proposed an innovative and cost-effective strategy in a recent op-ed. His plan, likely set to be fleshed out in the coming months and years, outlines a sensible set of criteria for identifying and supporting promising firms that deserve public investment.

Should Flowers’ proposal prove successful — and, by all indications, it’s a fundamentally sound plan with tremendous potential — it’s fair to bet that other states will follow suit. And that won’t simply be a victory for early-adopter jurisdictions. It’ll be a triumph for the American economy.

Five Websites That Teach Children About Government

Children can begin to learn about government in their first experience with education suggests Chip Flowers; that is, during preschool and kindergarten, and it can continue through high school. Much of this learning can be augmented by visiting some useful websites on the subject. Objective, interesting and ‘just the facts, ma’am’ but fun sorts of websites that are geared to hold a child’s imagination on the abstract concept of self-governing of a nation are not as easy to find as you may think.

Congress for Children

This website is colorful, interactive and entertaining. It has everything that a child would want in learning materials, and presents it in a manner that doesn’t feel like actually learning. That’s always a plus when dealing with children. Each branch of government has its own section, as well as historical information on the fight for independence and the framing of the Constitution. There are activities to choose from and a ‘show what you know’ link at the end of each section that provides a wrap-up activity for the lesson. There’s even a quiz section to let children demonstrate how much they’ve learned.

Ben’s Guide to U.S. Government for Kids

The U.S. Government Printing Office is behind this website, and it is a treasure trove of information. There are three sections, divided into age groups for levels apprentice (ages 4-8), journeyperson (ages 9-13) and master (ages 14+). The home page is colorful and cheery, with a Ben Franklin avatar to direct visitors. The site includes links to games for all ages, library resources and ‘learning adventures’ that further break down the main topics into easily learned, manageable chunks of information for each age grouping.

H.I.P Pocket Change Games

Don’t let the name of this website fool you. This is a product of the U.S. Mint and it covers far more than the nation’s currency. The “Branches of Power” game is awesome! It is guaranteed to hold a child’s attention and teach the principles of democracy without the child even realizing it.

There are links to multiple games in various topics, all of which will fascinate children of diverse ages.

This site’s catch phrase is “A safe place to learn and play.”  It has sections based on grade level: k-5 and 6-8. There’s also a section for teachers and one for parents. There are multiple links for exploring how government works and biographies of U.S. presidents. The site is easy to navigate and the graphics are colorful and easy to follow.

Explore the Election: How Government Works

This site is included here because of the interactive games it offers. These games are geared more toward higher grade level students, in the range of fifth to ninth. The game “You’re the President” is particularly challenging. The newspaper mock-up that can be printed at the end is a deal maker for this site!  There are links to explanations of how government works, and the games allow the learning to be applied to governing scenarios. The “Interview with Ben Franklin” is also quite entertaining. Anytime learning can take place under the guise of a game, a child’s attention will be captivated.

Five Organizations Helping Create Tomorrow’s Leaders

Unemployment. Inequality. Global warming. The youth of today face a bleak future thinks Chip Flowers — from economic meltdowns and political problems to environmental crises and social conflicts. They’re victims of messes created before their time, but they will be the ones responsible for cleaning them up. The five organizations below are providing future generations with the tools to overcome today’s worsening issues. With their help and help from similar organizations—there’s hope.

Tomorrow’s Leaders Today (TLT)

This California-based organization teaches area high school juniors that they can become leaders, as well as productive members of their community, through TLT’s programs in leadership, career readiness and community participation.

Teens learn about local businesses, government and nonprofits by exploring how their city operates. In the Career Readiness Program, they are taught the crucial skills needed to succeed in a 21st century workplace. The Youth Empowerment Council provides an avenue for youth to be involved in local government, as well as giving them an opportunity to teach elementary and middle school students about civil engagement.

An impressive 90 percent of TLT’s graduates go on to college, and 75 percent of them go on to volunteer in their communities.

Girls For A Change (GFC)

GFC is an international organization that empowers girls to create change through connecting with adult women coaches. This organization gives young women the confidence to speak up, realize their full potential, become leaders and make a real difference.

The Girl Action Teams are free after-school programs, often in low-income communities, where approximately 10 girls and two coaches meet to tackle issues faced in their community, as well as design, fund and implement solutions to these problems. Some examples of these projects include organizing a rally to end sexual assault and violence against women, creating a public service announcement against child abuse, and raising awareness and providing resources for immigrant education.

The traveling Change Your World Trainings teaches over 2,500 girls per year what social change really is, while providing examples from a diverse group of leaders.

Environmental Youth Alliance (EYA)

The EYA believes that “the environment is at the core of everything we are and everything we do.” This Vancouver-based non-profit charity has been connecting urban youth since 1991 to the magic of the natural world, while fostering community and building leadership skills.

The EYA accomplishes its mission through food gardening, pollinator awareness, urban forest skill building, horticulture therapy and nature observation programs. Through educational programming, children are given the opportunity to connect with nature through sight, touch and taste.

One of the programs takes place at the BC Children’s and Women’s Hospital, where a tucked away garden is having a positive and therapeutic effect on the health of patients. Patients and their families have gardened and harvested fruit, vegetables, herbs and flowers.

The Power of Hope (POH)

One way to spread a message of change is through art. You cannot discount art’s ability to enrich lives and give children an outlet to express themselves.

POH helps empower teens from diverse cultures and socioeconomic backgrounds through their art camps, retreats and workshops. POH’s learning programs take many forms, but they all value self-awareness, leadership, community and social change.

Teens age 14 to 18 can participate in summer camp, where artists and activists teach how to make a difference in the world. The Art of Leadership program is a leadership training program focused on leading groups and organizing events using the arts. During a five-day retreat, Hip Hop Hope brings youth together to collaborate on an inspiring hip-hop CD and have their voices heard.

Youth for Technology Foundation (YTF)

We live in a global, digital age, and technology will only become more important in the future, being employed to solve many problems. YTF is an international nonprofit that brings education, training and technology to youth in low-income U.S. communities, as well as developing nations.

YTF Academy is comprised of four programs—Tech Kids, Tech Teens, Tech Communities and Tech Enhancements. These programs emphasize participation, creativity, and developing critical thinking and problem solving skills. Over 1.4 million people have benefited from YTF. The businesses started by youth and women who completed the YFT Academy courses help sustain local economies.  

Youth Financial Education Is a Priority for Chip Flowers

Like all state treasurers, former Delaware State Treasurer Chip Flowers had a responsibility to improve the financial strength of the state he served — from the macroeconomic conditions that ensure strong, stable communities to the “micro,” household-level concerns that affect individual and family decision-making. During his tenure, he was fortunate to be able to leverage a powerful program called Financial Football — the fruit of a partnership between Visa, the National Football League, various state treasuries and other organizations — to advance this goal.

Chip Flowers: a vision for better financial education

Growing up in a military family, Flowers was fortunate enough to have parents who educated him about the value of a dollar. But his own experience taught him that not every child is so fortunate. Using these life-lessons, he resolved to provide as many kids as possible with the same invaluable opportunities that he enjoyed in his youth. Thanks to Financial Football, he was able to achieve this goal as Delaware State Treasurer. In fact, due to the interactive, online nature of Financial Football, he in some ways exceeded it, reaching children and parents far beyond the slender borders of his home state.

What’s Financial Football?

For former Treasurer Flowers, the Financial Football story began in 2013, when the Delaware State Treasury, Visa and representatives from the Baltimore Ravens — sorry, Eagles fans — announced the launch of the program in Delaware.

The release that accompanied the announcement described Financial Football as “a free educational video game and classroom curriculum” that awards yardage and touchdowns to students who correctly answer questions about personal finance. By redirecting kids who get the wrong answers, the game steadily builds financial know-how without sacrificing the thrills of a hard-fought game of pigskin.

According to the release, Flowers was able to get every middle and high school in Delaware, plus a who’s-who of community organizations and social charities, to sign on to the initiative. This achievement put Financial Football in the hands of tens of thousands of children across the state — many of whom don’t have access to the educational opportunities that Treasurer Flowers enjoyed as a child.

Education really can improve outcomes

Financial Football is part of Visa’s Practical Money Skills program, a comprehensive personal finance education initiative that has achieved stunning results during its short life span. Components of Practical Money Skills, including Financial Football, are now available to millions of students in a majority of U.S. states. Smartphone and tablet apps make programs more accessible to on-the-go students, and innovative state treasurers like Chip Flowers are continually experimenting with new initiatives to complement them.

These initiatives are making a real difference. In Delaware, for instance, Flowers integrated Visa’s programming into the state’s Prosperity Portal, a comprehensive database of easy-to-understand educational material for kids and adults. Anecdotal evidence from schools and community organizations suggests that the Prosperity Portal has boosted kids’ financial literacy and improved retention. Will other state treasurers follow Flowers’s lead? Stay tuned.

5 Ways Parents Can Teach Kids About Money Now

Numerous studies Chip Flowers has seen, have shown that kids don’t have a solid understanding of money. They’re spending money as if it grows on trees, opening credit cards and living far beyond their weekly allowances. Good financial habits start in childhood and with only 17 states requiring a personal finance course for students, educating kids really lies in the hands of parents.

It’s important to start educating your children now about financial literacy. Here are five ways to begin now.

Explain Where Money Comes From

Many kids see their parents either walk up to the ATM or the bank and leave with money. No, there is not a magic money tree inside but kids may think so. There is more to these money outlets.

Take your child to one of these venues and explain what services are provided: a place to safely keep your hard earned money, receive cash or obtain a loan. If you take them to the bank, ask the manager if he can give your child a tour and explain what the bank offers.

Give Them an Allowance

As your child begins to understand the role of the ATM and the bank, you may have whetted their appetite to have their own money. Start giving them a set weekly allowance for the chores that they perform. This will enable them to see the relationship between working and getting paid. It will also help them as they grow older and begin part-time jobs, earning more money and seeing its value.

Create a Budget

Upon receiving money, it may be burning a hole in your child’s pocket. Learning to save and spend is important so creating a budget for you child can be helpful. This will allow him to do both with his allowance. Revisit this budget on a set basis and make adjustments based on your child’s actions and goals.

In addition, for your teenagers, start preparing them to leave the nest by introducing them to checking accounts and credit cards.  By teaching them these financial basics and seeing the inflows and outflows alongside their budgets, it will make them more financial savvy when they’re living independently.

Learn the Difference: Wants vs. Needs

Whether it’s saving or spending, money management lessons need to include a differentiation between what we want and what we need. For kids, they may want a new toy or video game. By deciding if it’s a necessity or just a desired gift, this will build the foundation for managing finances and help kids learn to appreciate saving money for items they want. You’ll be surprised how conservative kids can be with money.

Use the Piggy bank

With your kid’s weekly allowance or a money gift, take that piggy bank in your child’s room and put it to use. By saving money, it will allow kids to discover its value.  You can start with a mutually agreed upon weekly goal or percentage. To show your commitment, also put aside some money with your child.

For older kids, have them open a savings account. This will provide an opportunity to learn about savings, interest and fees. Discuss different savings accounts and help you child decide which is the best choice for them.

These five steps are just the beginning of your kids’ financial education. By developing good habits early on, your children will have a greater understanding of money. They will take these habits with them as they grow older and face the many challenges that will come with money.

10 Sites for Kids Chip Flowers Thinks Makes Finance Fun

April is National Financial Literacy Month and a good excuse not only for adults to brush up on their financial skills but also a great time to teach kids about money. Whether it’s asking their parents questions, learning to save, spending their allowance or receiving their first paychecks, there are numerous ways kids can learn about money. Another method is through the Internet with its wealth of sites to teach and engage kids. These sites are all kid-friendly and hip to their increasingly mobile trends.

Take a look at these 10 great financial websites for kids recommended by Chip Flowers.

Kids of all ages:

Institute of Consumer Financial Education  – The ICFE/Kids section gives a host of money information and resources for kids. Young ones can learn about savings, credit and investments while older kids can study credit, the dangers of accumulating debt and financial planning.

The This site has something for everyone from young kids playing games to earn, spend, save and give money while older ones will enjoy the story of money movement and numerous quizzes and calculators.

Kids’ Money  – This dynamic, interactive site helps kids develop money management and money-making skills. It then shows through savings, the possibility to buying a coveted item such as a pair of sneakers or a video game. The site welcomes contributions and suggestions.

Elementary students:

Centsables – The Centsables, bankers by day but superheroes at night, battle the bad guys, saving kids from money mistakes and bad financial scenarios. Along with its videos, the interactive site also has games, comics, and activities to help kids get money management skills.

Sesame Street’s For me, for you, for later  – Using Sesame Street’s beloved characters, this site enables kids and their parents to view and create a dialogue on financial basics. Videos and games assist with the teaching and for offline activities, there are podcasts and printables. 

Kids Math Games -Kids will have a chance to learn about money through interactive games, which will enable them to count and use money. They can also open a new business such as a lemonade stand or a coffee shop to learn additional financial basics.

Middle school: The money section for middle school students includes videos on credit card facts and real-life expenses. There are also money vocabulary lists, tools and links to expand their money education.

Sense and Dollars  – This interactive site has numerous money games to play. For kids desiring to leave home and become financially independent, the Check It Out game, shows a dose of reality as participants will get a job, a monthly income and bills to pay. It’s challenging as kids will learn the value of money through this experience.

High school:

American Saves  –Kids 14 and older can enroll in the Younger Saver program and set a personal monthly saving objective as low as a $5. The selected amount can be saved in different ways. The site also offers advice, encouragement and tools to achieve this.

Financial Football For the sports-obsessed kid, this sites offers Financial Football and Financial Soccer video games. Kids will select a team and take financial management quizzes as their players move along the field, scoring points through their answers. Additional quizzes and calculators are also included on the site.