Aug 09, 2011 by David Catalano in Modea Culture
Jobs...the buzzword you hear more than any other in politics. President Obama recently launched an initiative to increase entrepreneurial activity in rural America to spur job growth. Aneesh Chopra, the Chief Technology Officer of the United States, is visiting communities that are bucking the trend of mounting job losses and the exodus of young people from these communities. Naturally, he decided to visit Blacksburg, home of Modea and the 44th largest research institution in the US, Virginia Tech. Over the past few years, VT has spun off hundreds of companies, many of which are located in Blacksburg at the VT Corporate Research Center.
How do you spur job growth? By focusing on the long-term.
To date, we have reinvested every dollar of profit made by the company, back into the company, except for funds needed to pay federal and state taxes. This tax amount shouldn't be taken lightly. It amounts to a significant sum that could be put towards job growth, equipment purchases, and infrastructure development. Things that drive economic growth.
Why can’t the government take a more long-term view of businesses that are making large investments in infrastructure development and job growth? If the government took a longer view -- deferring income to the future in order maximize growth and profitability -- the deferred tax revenue would be far greater. All while having generated more jobs.
A tax deferment would have a huge impact on the growth of companies like Modea. It would mean millions of dollars of capital that would allow us to continue to invest in recruiting talent from across the nation, while at the same time funding more R&D projects. A deferment would also support larger capital-intensive projects, such as the construction of a new headquarters in downtown Blacksburg, which is currently underway. All of these activities are tied directly to job growth.
I was pleased to hear President Obama mention “long-term” several times during his address this afternoon. I do hope that our government will focus on a tax plan that will stimulate true economic growth for the long-term, not just for today.