Vice President Kamala Harris recently announced a proposal to significantly increase the tax deduction for small-business startup costs as part of her “Opportunity Economy” platform.
While this policy appears to support new entrepreneurs, conservative economists argue it mirrors a previous Trump proposal that Harris herself once opposed. Critics claim her plan would harm small businesses by simultaneously raising taxes, making it harder for them to thrive despite the increased deduction.
Key Facts:
- Harris proposed increasing the small-business startup tax deduction from $5,000 to $50,000.
- In 2018, Republicans, led by President Trump, proposed a similar increase, which Harris opposed at the time.
- Critics argue that Harris’ support for raising taxes on corporations and individuals would negate the benefits of the deduction.
- Conservative economists have voiced concerns over the contradictory nature of Harris’ policies.
The Rest of the Story:
Vice President Kamala Harris recently introduced a small-business tax credit aimed at reducing the startup costs for new businesses. The proposal includes a substantial increase in the deduction for startup costs, from $5,000 to $50,000. Harris has promoted this policy as part of her broader “Opportunity Economy” initiative, intended to help entrepreneurs and innovators “get off the ground” more easily.
However, this proposal has sparked controversy, particularly from conservative economists. Kevin Hassett, former chairman of the Council of Economic Advisers under President Trump, pointed out that Harris’ plan is strikingly similar to a Republican policy introduced during Trump’s presidency.
“In 2018, President Trump and the Republicans wanted to expand the deduction to $20,000. It actually passed the House with very little Democratic support. And so, you know, Republicans are on the record as saying that there should be a bigger deduction for the start of a small business,” Hassett noted during an interview on PBS. “And so this is an example of her reaching into Donald Trump’s playbook and taking one of his policies.”
Hassett additionally questioned Harris’ apparent flip-flop in her stance towards the deduction.
“Democrats were opposed to it,” he continued. “And so, it’s something that she was opposed to before she was for it. And so you could say, well, is she really for it now? Or, you know, could she explain why she changed her mind?”
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Meanwhile, Harris’ other economic policies, such as raising marginal tax rates on corporations and individuals, have drawn additional criticism. Conservative economist E.J. Antoni stated to Fox News that increasing taxes alongside boosting the startup deduction creates a conflicting economic message.
“She wants to increase taxes on all kinds of income, on all classifications of income, so no matter how the small business is ultimately structured, they will still be paying more,” Antoni said.
“Now, is that going to be diminished by this increase in the tax deduction? Absolutely. But, then, why are you doing both? That doesn’t make any sense.” he remarked, pointing to the confusion over Harris’ economic strategy.
Another Kamala Harris whopper, saying of her suggested $50,000 tax deduction for small business startups, “it’s essentially a tax cut for starting a small business.” A tax deduction is not a tax cut, far from it. Like saying the 10 cents the tooth fairy left under your pillow is…
— Elizabeth MacDonald (@LizMacDonaldFOX) September 15, 2024
Commentary:
Kamala Harris has now been in office for three years, and during this time, her economic policies have not exactly been friendly to small businesses. Her recent small-business proposal feels like an attempt to borrow from Trump’s playbook, but it lacks the cohesion and understanding of the market that was present in the original.
Increasing the tax deduction while simultaneously pushing for higher taxes across the board shows a lack of awareness of how businesses truly operate. Instead of relieving the financial burden on small businesses, Harris’ proposals might end up making it more expensive to run one, as any benefit from the deduction would likely be wiped out by higher taxes.
Harris does not seem to grasp the real-world implications of her policies. Small businesses are already struggling with regulatory and financial pressures, and adding more complexity to the tax code does not help them. A better approach would be to adopt smarter, more consistent tax reforms that truly benefit business owners rather than creating a confusing and burdensome economic environment.
Kevin O’Leary demolishes Kamala Harris and small business proposal. Said he is glad she woke up and realized small businesses create up 80% of the jobs in America but where has she been for 3.5 years when they have over regulated businesses to death? pic.twitter.com/HJHEiZk4jW
— Insurrection Barbie (@DefiyantlyFree) September 5, 2024
The Bottom Line:
Kamala Harris’ proposal to increase the small-business tax deduction may look like a win for entrepreneurs on the surface, but her simultaneous push for higher taxes creates a contradictory and confusing economic agenda. Borrowing from Trump’s policies without understanding the larger impact, Harris risks making it more difficult for small businesses to succeed.
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For real economic growth, small businesses need simpler, more consistent policies—not politically motivated contradictions.
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