1. LEVERAGING THE FEDERAL TAX CODE TO PROMOTE SELF-EMPLOYMENT AND STATE AND LOCAL JOB CREATION Bill Schweke, Senior Fellow, CFED Big Ideas on Job Creation Conference June 16-17, 2011

2. www.cfed.org 202.408.9788 Purpose Use the federal tax code to deliver essential business development and financial services to low-income and other startup entrepreneurs, with the aims of simultaneously creating more new jobs and improving service delivery.

3. www.cfed.org 202.408.9788 US Economic Situation  Massive job losses  Weak recovery  Deep political and policy divisions

4. www.cfed.org 202.408.9788 Policy Parameters  Bi-partisan appeal  Private sector involvement  Help small business if possible  Not too capital intensive  Not too complex administratively  Quick results  Leverage financial and in-kind resources  Scalable  Minimize government costs  Rely on state and local implementation

5. www.cfed.org 202.408.9788 Key Features of Our Approach  Focus on self-employed (especially startups and first time tax filers)  Target tax time and existing tax prep infrastructure  Use Schedule C and EITC  Minimize direct spending/maximize off-budget  Encourage tax compliance  Develop referral system  Help exit informal economy  Improve capital base, “draw,” and management skills and understanding

6. www.cfed.org 202.408.9788 Self-Employment: Its Importance  Size and diversity  Political  Entrepreneurship: opportunity and barriers  Small business and microenterprise support system and programs  VITA and other sites

7. www.cfed.org 202.408.9788 Some Criticisms and Concerns  Is it high road?  Objections  Counter-arguments

8. www.cfed.org 202.408.9788 Tax Barriers to Self-Employment  Schedule C  Numbers  Tax liabilities  Fairness  Need for TA  How to scale up services

9. www.cfed.org 202.408.9788 Self Employment Tax Initiative (SETI)  Goals  Partners  How SETI works  Models  Findings  Lessons

10. www.cfed.org 202.408.9788 Reforms  State  Federal

11. Contact: Bill Schweke, bschweke@cfed.orgbschweke@cfed.org Questions?