Harris Introduces Small Business Tax Break Plan

A new proposal for small business tax breaks was unveiled by Vice President Kamala Harris on Sept. 4, aiming to increase the tax deduction for startup costs from $5,000 to $50,000. While experts believe this plan could stimulate economic activity, they caution that it would also lead to a significant increase in the deficit over the next decade. The proposal would require congressional approval and has drawn criticism from the Trump campaign for potentially driving up national debt.

Garrett Watson, a senior policy analyst, estimated that the proposal could cost the federal government around $20 billion over 10 years. This plan is part of Harris’s broader economic agenda, which includes initiatives such as a Child Tax Credit plan, banning price gouging, and building affordable housing.

The new proposal would allow startups to spread the deduction over several years or defer claiming it until the company becomes profitable. While some experts see potential bipartisan support for promoting entrepreneurship, others question the inconsistency of increasing taxes in some areas while providing tax breaks in others.

Despite potential concerns about the cost, the proposal is generally seen as beneficial for small businesses and could be a bipartisan issue. Harris’s economic plans, including the small business proposal, would require congressional approval and could have significant long-term costs for the government.

She aims to ensure that one-third of federal contract dollars are allocated to small businesses.

Her strategy involves increasing investment in community development financial institutions that cater to low-income Americans and underserved communities that traditional lenders often neglect.

During her address, Harris emphasized that her plan “will enhance access to venture capital” for small businesses.

Additionally, Harris has proposed extending subsidies under the Affordable Care Act to expand coverage for more Americans. She suggests raising the current $35 monthly cap on out-of-pocket insulin expenses and the $2,000 annual limit on out-of-pocket prescription drug costs not only for Medicare beneficiaries but for all Americans. The $2,000 cap for Medicare Part D drug costs will be implemented in January 2025 as part of the Inflation Reduction Act.

Furthermore, Harris has put forth a plan to eliminate federal income taxes on tips, aligning with a promise made by former President Donald Trump during his campaign earlier this year.

‘Working on Republican Turf’

The Trump campaign responded to Harris’s new proposals with a statement.

“If Kamala wanted to assist small businesses, why has she not done so during her four years as vice president? Why has Kamala supported Bidenomics, which has led to historic inflation and soaring energy prices for small businesses, reducing their profit margins and jeopardizing their livelihood?” the campaign questioned.

Political science professor Aaron Dusso from Indiana University-Purdue University Indianapolis pointed out that it is strategically wise for Harris to focus on small businesses, as the term holds a positive image among the public.

However, he highlighted that this is typically a cause championed by Republicans, and mentioning “business” may associate voters with the Republican party.

Generally, voters perceive Republicans as more adept at managing the economy and supporting small businesses, Dusso stated in an interview with The Epoch Times.

“By emphasizing small businesses, Harris is operating on Republican territory. Stepping onto the opponent’s playing field can be a risky move for a politician,” Dusso commented. “This does not mean that one should never address the opposing party’s key issues. It simply suggests that these should not be the primary focus.”