Kamala Harris Proposes $50,000 Tax Deduction for New Small Businesses

Photo : Reuters

New Hampshire – On Wednesday, Vice President Kamala Harris is set to announce a bold new economic proposal aimed at supporting small businesses. The plan includes a significant expansion of the startup expense deduction, increasing it from the current $5,000 to $50,000. This proposed tax break represents a tenfold increase over existing relief measures and is part of Harris's broader strategy to appeal to middle-class Americans as she campaigns for the presidency.

Harris’s new initiative is designed to draw a clear distinction between her economic policies and those of her primary opponent, former President Donald Trump. Central to her economic agenda is a focus on increasing taxes for wealthier individuals and corporations while ramping up federal investment in social programs, including childcare, to support working families.

The announcement will take place in New Hampshire, a key battleground state. According to a campaign official, the proposal to expand the startup expense deduction is intended to alleviate financial burdens for new entrepreneurs. The official noted that the average cost to start a new business is approximately $40,000, making the increased deduction a potentially substantial aid for small business owners.

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In addition to the expanded tax deduction, Harris's plan includes several other measures to support small businesses. These include a standardized tax deduction for small business expenses, streamlined access to occupational licenses nationwide, and the creation of a small business expansion fund. This fund aims to assist community banks with covering interest costs for small business loans.

The Small Business Administration reports that the 33 million small businesses in the U.S. employ about 46% of all private sector workers and have been responsible for 70% of net new jobs since 2019. The new plan also targets a goal of 25 million new small business applications during Harris’s first term, surpassing the 19 million new applications seen under President Joe Biden.

However, Harris's economic agenda may face challenges in Congress, where similar proposals have previously been rejected. Critics, including Trump's economic advisers Kevin Hassett and Stephen Moore, have argued that Harris's proposals could exacerbate inflation and negatively impact the economy.

As Harris prepares for a debate with Trump on September 10, economic issues are expected to be a central topic of discussion. Republicans have criticized both Harris and Biden for economic policies they claim have led to rising prices and inflation.

Harris's broader economic agenda, unveiled in her first major economy-focused speech as a presidential candidate, includes plans to cut taxes for most Americans, address "price gouging" by retailers, and increase the availability of affordable housing.

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