Additional Coverage:
- Kamala Harris’ tax plan for small businesses sounds like it will cost a lot of money — it won’t (newsbreak.com)
Harris Proposes Tax Credit for Small Businesses
Vice President Kamala Harris is targeting small businesses with a proposal to increase the small business tax credit from $5,000 to $50,000. This move would allow business owners to deduct more startup expenses immediately, rather than over 15 years as current law requires.
Impact on Entrepreneurs
Experts say the proposal would be a significant boost for small businesses, particularly those with limited capital. Patricia Oswald, who launched a startup in 2022, believes the credit would have been invaluable in offsetting her early expenses.
Budgetary Impact
Despite its potential benefits, the proposal is not expected to have a major impact on the federal budget. The Tax Foundation estimates the cost at $24.5 billion over 10 years, a relatively small sum compared to the Harris campaign’s overall tax plan.
Economic Benefits
If the proposal encourages more small business creation, it could spur economic growth. Small businesses employ nearly half of the private sector workforce and are a source of innovation. However, the full economic impact remains uncertain.
Congressional Approval
Harris’ proposal requires congressional approval, but experts predict bipartisan support for small business tax breaks. If passed, the credit would disproportionately benefit entrepreneurs with less access to capital, such as women and people of color.