New business owners could get a $50,000 tax deduction under Kamala Harris's plan
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- Kamala Harris is aiming for 25 million new business applications in her first term.
- To get there, she's proposing an increased tax deduction and reduced red tape.
- That comes after a post-2020 small business boom, which has seen record applications.
Vice President Kamala Harris wants you to start a small business.
Harris is set to roll out another economic policy, focused on a new goal: boosting small business creation. Harris's goal — which she'll announce on Wednesday — is 25 million new business applications in her first term if elected.
That would outpace the over 18 million new business applications filed so far during the Biden-Harris administration, which comes amid a post-2020 business application boom. Harris aims to hack away at some of the red tape and startup costs new businesses face when they're setting up shop.
According to a Harris campaign official, Harris wants to bolster the tax deduction that small businesses can claim for initial startup costs. Some small business owners have to turn to creative funding measures to get their businesses off the ground, which can come with their own risks.
Harris's proposal would increase that startup deduction tenfold, upping it from $5,000 to $50,000; businesses would also be able to defer claiming it until they turn a profit — which is when they'd also likely encounter a larger tax burden.
The other aspect of Harris's plan hinges on easing the logistical burden on new entrepreneurs. It's no secret that many small businesses must wade through administrative red tape to finally get to their opening days.
Harris's proposals include incentives for local governments to reduce their own red tape, creating a standard deduction for small businesses to ease the time spent on taxes, and chipping away at barriers in obtaining occupational licenses that can inhibit businesses or workers from crossing state lines.
Harris also wants to pour cash into small businesses: She wants to guarantee that a third of federal contract dollars will go to smaller businesses and set up a fund to help community banks cover the cost of interest for small businesses.
Harris previously called for a restoration of the expanded child tax credit — bringing it back up to $3,600 — and giving middle and lower-income parents a $6,000 credit in their child's first year of life.
How far a hypothetical future President Harris could get with major economic proposals will depend on the makeup of Congress. Attempts by President Biden to restore the child tax credit were stymied in the Senate; a gridlocked legislature might mean even more roadblocks for potential President Harris.