Key provisions of the Tax Cuts and Jobs Act (TCJA), signed into law by former President Donald Trump in December 2017 are set to expire at the end of 2025 unless extended or modified by Congress. A new tax bill is likely to be enacted.
Background
The passage of the bipartisan JOBS Act ushered in Regulation Crowdfunding (Reg CF) and since May of 2016, over 8,500 companies or investment campaigns have raised over $2.2B in capital from more than 2 million ordinary Americans – typically in amounts averaging $1,400 per investment. Only US companies can raise funds using Regulation Crowdfunding and these companies demonstrate remarkable resilience and durability, with failure rates below 10% - far lower than the 75% failure rate of VC-backed startups and the 50% failure rate for small businesses (as reported by BLS over a five-year period). Over $7.5B in economic activity has been generated which has created or supported over 400,000 jobs. Successfully funded companies across all 50 states and from over 620 industries now represent a market valuation of nearly $80B.
The Proposal
It’s now time to unleash Reg CF as an engine for US economic growth. Our coalition supports amendment of the Internal Revenue Code of 1986 to allow a 50% credit against income tax, up to $1,000 annually, for investments made pursuant to Regulation Crowdfunding. The Act should be called: Targeting Resources to Unleash Market Prosperity (TRUMP) Jobs Act
Benefits to the Economy: Massive Economic Growth
This policy would create or sustain over 1 million new jobs, economic growth of $120 billion, and nearly 30,000 American businesses each year.
Benefit to the Treasury: Net Fiscal Surplus
This policy is self financing. With dynamic scoring and an expected multiplier effect of 6x, the result is a budgetary net gain to the US Treasury of $8B per year or $80B over 10 years. This surplus can help offset other budgetary needs.
URGE CONGRESS TO ACT NOW AND PASS THE NON-PARTISAN TRUMP JOBS ACT
About Us: The Coalition for Crowdfunding American Jobs and Prosperity (CCAJP) represents a wide array of stakeholders, including non-profit associations, economic policy think tanks, crowdfunding intermediaries, industry professionals, registered investment advisors, and small business advocates. Together, we are committed to unleashing the transformative potential of Regulation Crowdfunding to drive innovation and economic growth, create jobs, and foster prosperity in communities across America.
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Very exciting! This could be huge for companies trying to raise money using regulation crowdfunding.