Wednesday, February 3, 2010

The Simplicity Test: A Simple Policy Guide for Job Growth

by Mark Cuban

The simplest way to create more jobs is to allow small business and entrepreneurs to spend less time and money on lawyers and accountants and redirect that intellectual and financial capital to the core competencies of their business.

Any new government policy that requires the hiring of lawyers and accountants will not lead to new jobs, it will lead to time and money being wasted and fewer jobs being created.
Like the administration before it, the current administration seems to have no concept of what it takes to start, run and grow a small business. None.

Here is a hint. If you want to see more jobs created by Small Businesses and entrepreneurs REDUCE the amount of paperwork required. Dramatically simplify the tax code. In other words, if you REDUCE THE OVERHEAD of small business, you effectively create capital for them through reduced costs. Not only do you improve their financial position, but you reduce that great big time suck known as dealing with your accountants and lawyers. The more time wasted with “professional services”, the less time spent doing your job. This seems to be a concept lost on government.

One last thing. It appears to be a goal of the administration to free up loans to small businesses. For the sake of this comment, let me re-define Small Business as those companies with fewer than 20 employees. There are exceptions, but more often than not, the stupidest thing a business of this size can do is borrow money. Its stressful enough for a small business in these times to be profitable. Add to that stress the need to repay a loan and success becomes far more difficult.

If we want to accelerate the formation and growth of these small businesses we need to first reduce the costs imposed on them by the government (at all levels) and then simplify and reduce the costs of raising capital. Forget government loan guarantees. Make capital gains on investments up to $1mm in small companies tax free. Make this process paperwork free for the small business and a 1 page form for the investor.

Thats how we will see economic and job growth in this country

Mark Cuban is the owner the NBA Dallas Mavericks. The above originally appeared at Blog Maverick, Cuban's personal blog.


  1. Mark Cuban's a savvy businessman, but he makes the mistaken assumption that what drives this administration is concern for economic growth vs. a desire to grow government's reach and power.

    Sorry Cube; good ideas, but wrong audience.

  2. I agree with Anonymous. Cuban's suggestion that the govt reduce paperwork will allow the govt to look good by manipulating their bureaucracy. And his suggestion to eliminate cap gains tax for businesses under a certain size?! The only answer is across the board cuts in all things government.