Put the word “dream” after any country other than “American” and it just doesn’t sound the same.
There’s no Italian Dream. No Canadian Dream. No Israeli Dream. No Norwegian Dream.
The American Dream was responsible for bringing many immigrants to this country. But is the American Dream really all it’s cracked up to be? Is there still such a thing? Are we really living in the land of opportunity?
According to the World Bank’s Doing Business Report, the U.S. ranks seventh as a business-friendly environment. A closer look at the report and other information reveals common themes and areas where the U.S. consistently falls short and has room for improvement.
Singapore leads the World Bank report, followed by New Zealand, Hong Kong, Denmark, South Korea, Norway, then the United States, the United Kingdom, Finland, and Australia as the top places to do business.
The U.S. could improve in the four areas below to make us more business friendly and more competitive in the global economy:
- Corruption and transparency
- Public Wi-Fi speed
There are a number of areas where the U.S. is losing its ranking as the place to be. We have a lot to learn from other countries that are becoming more business friendly than we are.
Are there other areas you feel should be on this list? Leave us a comment below.
Better Immigration Policies for Entrepreneurs
Immigration reform is a hot-button political issue in the U.S. There are a number of key issues concerning U.S. immigration policy, from border security to businesses taking advantage of undocumented workers to the rights of those who’ve been living and working in this country for years undocumented.
While there’s no magic solution to immigration, there is a huge blockade to coming to the U.S. that is affecting our business climate.
The number of highly skilled, foreign-born STEM (science, technology, engineering, and math) workers, innovators, and entrepreneurs who are not allowed to come to the U.S. or to work and live here is troubling. If conditions don’t improve, the U.S. will lose its place as the hub for entrepreneurship, technology, and innovation.
Why is allowing access for entrepreneurs and those highly skilled in STEM fields important?
- We are seeing increased demand for STEM jobs, and supply is not keeping up as the gap continues to grow.
- Roughly 40% of Silicon Valley startup founders are foreign-born.
That’s billions of dollars in (tax) revenue and jobs, not to mention the innovation that would find a home here instead of abroad.
So what is the visa outlook for entrepreneurs in the U.S.?
One of the most common visas for techies and startups is the H-1B visa, though a qualified immigration lawyer can help direct candidates to other visas they may qualify for.
Should we assume these slots are being filled by the best and brightest? We could, but we would be wrong. The H-1B visas are filled through a lottery system — that’s right, a lottery. In 2014.
The U.S. is moving in the wrong direction as the costs of the visa and its difficulty to obtain are increasing while its availability is shrinking.
In 2004, 195,000 H-1B visas were available. In 2014, only 65,000 were available, with 20,000 extra reserved for those with advanced degrees. That means 130,000 talented people a year are not being allowed into the U.S., not to mention the immeasurable sentiment this is creating abroad against coming here.
In addition to the limited number of visas available, U.S. immigration policy is expensive and difficult to navigate, deterring some would-be immigrants and college students who are concerned with their ability to stay in the U.S. after graduation.
How can we do a better job?
Countries the U.S. Could Learn From
Other countries are more lenient, and many are attracting talent that might otherwise end up stateside. A few countries that could teach the U.S. a thing or two:
Canada offers entrepreneurs and potential entrepreneurs a low barrier to entry with its Start-Up Visa Program, which targets immigrants who have the potential to build innovative companies that can compete on a global scale and create jobs.
Got a great business idea? If you can get support for your startup from a designated Canadian organization, which includes qualified venture-capital companies, angel investors, and incubators, you can immigrate to Canada.
In 2004, Singapore launched the EntrePass to attract foreign entrepreneurs who have innovative business ideas.
Singapore has one of the most open and welcoming economies in the world. The government plays a critical role in directing economic policies and promoting a pro-business and pro-foreign investment climate, which along with world-class health care and a high quality of life allow Singapore to attract many highly skilled foreigners and entrepreneurs.
While there are a number of variable factors — whether you are single, married, or head of household — here is a quick look at individual tax rates for 2014, an overview of corporate taxes in the U.S., and then a (painful) look at how paying taxes in the U.S. compares with a few other countries.
Individual Tax Rates for 2014
|Top Tax Rate||Income|
|10%||up to $9,075|
|39.6%||$406,751 or more|
If you fit another category and would like to check your tax bracket for 2014, click here.
Check out this fun interactive table to compare what your take-home pay would be in other countries.
For most Americans, Uncle Sam is taking at least 25 cents out of every dollar earned. But that’s not all.
If you own or run a business, you are at least somewhat familiar with corporate taxation.
Corporate taxes are another area where the U.S. leads the pack, with a 35% rate. States also impose a marginal corporate tax, which is 0-12%.
To see how we compare to other countries, go pour yourself a drink, come back and see what TaxFoundation.org has reported on corporate taxes in the U.S. When you have your drink in hand, click here.
This heavily taxed business environment cuts into profits of businesses regardless of which side of the aisle your political views fall on. It also makes the U.S. businesses less competitive globally.
So are all these taxes really necessary? What countries are using approaches other than heavily taxing their citizens and businesses?
Countries the U.S. Could Learn From
While no individual or corporate tax system is perfect, these countries are pushing the needle in a different direction. Keep in mind there are often other financial, cultural, and political factors that cause these countries to operate as they do, and it’s not to be assumed that these strategies could be executed in the U.S. without other changes or impacts being felt.
In addition to being known for having friendly locals, Ireland is also well-known as a friendly place for business, with a corporate tax rate of only 12.5%.
Let’s say you set up a factory and your company generates $10 million a year in income. In Ireland, you would be responsible for $1.25 million in taxes. In Illinois, you would be responsible for $3.5 million in taxes.
Who else is ready for a Guinness?
Singapore enjoys a 17% corporate tax rate and residents are taxed at progressive rates ranging from 2% to only 20%. Despite lower taxes, Singapore is known for its cleanliness, world-class health care, and one of the world’s highest GDPs per capita — nearly $80,000.
United Arab Emirates
Dubai is like a startup that just hit it big: Big buildings, displays of wealth everywhere, and Dubai Internet City and Dubai Media City (within the Dubai city limits) are filled with companies enjoying the tax haven of the United Arab Emirates.
Individuals and corporations pay zero in taxes in the United Arab Emirates, though there are exceptions.
New Zealand keeps its tax code simple. Kiwis have a 28% corporate tax rate, no capital gains tax, no Social Security tax, and no payroll tax.
These are just a few of the countries that offer more favorable tax environments than the U.S. For a full list of international corporate tax rates, click here.
Corruption and Transparency
In 2008, the U.S. government bailed out Wall Street by using $700 billion in taxpayer money to rescue the financial industry and prevent the U.S. economy from collapsing. Or so we were told. The bailout was sold to us as a way to save us from nearly inevitable economic collapse. What did the bailout actually accomplish?
The same financial institutions that were responsible for the speculation, lack of capital reserves, and bad business decisions have been re-empowered and are again reaping the wealth of the stock market and pocketing record profits.
While our government has grown, so have income inequalities and opaqueness of government. We’ve established private institutions that take our money and are deemed “too big to fail.”
While we are far from last on the list, there are certainly some pointers the U.S. could take in making business more transparent and honest.
Countries the U.S. Could Learn From
New Zealand’s stable economy and political system, reputation for innovation, and ease of doing business make it an attractive place to invest.
Anti-corruption NGO Transparency International continues to rank New Zealand No. 1 for honesty and integrity in its public sector (based on 2013 rankings). This is the eighth year in a row the country was either first or tied for first in the Corruption Perceptions index (the U.S. comparatively ranks 19th).
Denmark ties with New Zealand on the anti-corruption and transparency list.
Public Wi-Fi Speeds
Oh, the pain of a slow Internet connection.
Just as encyclopedias held the answers to our questions growing up, the Internet and Internet speeds are key tools for learning and business efficiency. While we view ourselves as the leaders in technology and innovation, more than one report on Internet speeds in the U.S. tells a very different story.
The U.S. is ranked 29th in worldwide broadband speeds, according to Net Index. The leaders: Hong Kong, Singapore, Romania, South Korea, Switzerland, and Japan.
As the saying goes, we can learn something from everyone we meet.
The U.S. is still the world’s only superpower, but if we want to remain a leader in business, economics, entrepreneurship, and innovation, we would be wise to learn a thing or two from the countries on this list and others. It’s time to get our act together.
In analyzing the top countries in the World Bank’s Doing Business Report, the major areas in which the U.S. can create a more business-friendly environment relate to increased government transparency and keeping taxes more competitive with the global market.
Can you think of another area where the U.S. could learn from other countries to improve the ease of doing business here? We would love to hear from you in the comments section below.
Joe Sweeney is a social entrepreneur, committed to helping individuals and organizations grow and solve problems. Most recently, he was the co-founder and CEO at 100state, a nonprofit, startup community of entrepreneurs, educators, and innovators in Madison, Wis. Joe was recently named one of 53 entrepreneurs on Madison Magazine’s “M List: The New Who’s Who” for his work with 100state.