Kamala Harris to Propose Up to $50,000 Tax Deduction for New Small Businesses

Reuters

13:57 JST, September 4, 2024

WASHINGTON (Reuters) – Vice President Kamala Harris will propose a tax deduction of up to $50,000 for new small businesses on Wednesday, a tenfold increase over existing relief and her latest economic policy aimed at winning over middle-class Americans after jumping into the presidential race over a month ago.

Harris is aiming to draw a contrast with her opponent, Republican Donald Trump, on broad economic strategy, specifically on tariffs and taxes. Her progressive economic agenda is focused on taxing wealthier individuals and companies more, and increased federal funding for child care and other social programs aimed at working parents.

The new plan, to be announced in New Hampshire, will propose expanding the startup expense deduction for small businesses from $5,000 to $50,000, a campaign official said. On average, it costs $40,000 to start a new business, the official said, speaking on condition of anonymity.

The United States’ 33 million small businesses employ about 46% of all private sector employees, according to the Small Business Administration, and were responsible for 70% of net new jobs since 2019.

The plan will also allow a standardized tax deduction for small businesses, make it easier to get occupational licenses around the country and include a small business expansion fund to enable community banks to cover interest costs, the official added.

Harris’ overall economic agenda may run into resistance from both corporations and Congress, which will need to pass laws to change most tax policies and rejected similar proposals when they came from President Joe Biden.

During her first major economy-focused speech as the Democratic presidential nominee, Harris last month vowed to cut taxes for most Americans, ban “price gouging” by grocers and build more affordable housing.

She will also on Wednesday announce a goal of 25 million small business applications during her first term, the official said, exceeding the 19 million new small business applications under Biden, who took office in January 2021.

Trump economic advisers Kevin Hassett and Stephen Moore have previously argued that Harris’ proposals would boost inflation and damage the economy. Trump and Harris will debate on Sept. 10, in a closely watched match that’s expected to focus in part on the economy.

Republicans fault Biden and Harris for presiding over an economy in which prices have risen and blame their policies for driving inflation.