Ms. CHU. America doesn't have a small business problem; it has a startup problem. That was the title of a recent Washington Post article. It pointed to the fact that self-employed startup businesses have been the chosen alternative for millions of Americans, but we must do more to help them. Today, one out of every three new jobs is created by self-employed startup businesses.
But we can do better. Compared to other wealthy countries, the U.S. ranks 23rd in new businesses formed per thousand working adults. These entrepreneurs take risks to make it on their own, but they could do better if we help them be competitive. That is why yesterday I introduced the Entrepreneur Startup Growth Act.
One of the most intimidating times of the year for new owners is tax season, as they learn and navigate the different tax standards for businesses. My bill turns this tough time into an opportunity by offering not only affordable business tax assistance but business development services so that these companies can get the advice they need in order to grow.
This bill builds on the Self-Employment Tax Initiative launched by CFED, the Corporation for Enterprise Development, a nonprofit economic opportunity organization. According to CFED, nearly two-thirds of all self-employed people are operating business startups.
Self-employed startups in their first year of existence create an average of 3 million jobs per year. In fact, without business startups, there would be no net job growth in the U.S. economy. Nearly all net job creation since 1980 has occurred in self-employed startups less than 5 years old. They are critical to our economy.
In my bill, community-based organizations, local governments, and higher education institutions are eligible to apply for grants up to $75,000 to operate this program. The IRS will work with the Small Business Administration to ensure that the operators of the program have expertise in both tax assistance and business development assistance.
This is a program that works. With such a modest investment in this assistance, 62 percent of businesses were able to get refundable tax credits such as EITC and Making Work Pay, refunds that they might otherwise have missed out on. The Entrepreneur Startup Growth Act will help businesses grow and help low-income households build the assets that they need in order to survive. They will get the economic security they desire. With this, we will be able to help people climb up that ladder of opportunity and reach for that American Dream.