Like you, I'm in favor of it too. But I think that it fails to address a lot of issues that could make it a force that is exponentially larger than it is at the moment. Of course, as you mentioned, a lot of these things are out of its scope and must originate from places like Congress.
It would be awesome for Obama to create a panel with proven Serial Investors and Serial Entrepreneurs and have them create a national federally funded YC like organization. Match all the investments with government grants up to a certain amount and watch startups revitalize America.
Your completely right, the complexity is a much larger threat than the actual amount paid out. Ideally, and this would help immensely, a grace period would include no taxes of any kind paid out for a set amount of time, and no tax complexities to deal with in the set time. We report our numbers on a special tax form and that's it. No tax consultants needed. This would ensure that a larger number of start ups make it to a point where they are large enough to A) hire more people and B)deal with tax complexities without them being a drain on a company's chance of success. If this was possible I would bet that the chances of start ups surviving passed infancy would rise dramatically.
My team only applied to YC. I'm not sure how good our chances of getting in are, because our start up is only partially software run, but I have my fingers crossed!!!
You would think, with the big deal Obama is making about how we need to do everything we can to encourage more start ups, he would offer some kind of 2 year tax free grace period. I understand that we need to tax to some extant, but how much more likely do you think start ups would be to succeed if we didn't have to worry about taxes eating away our already limited money during the first most crucial steps?