Vice President Kamala Harris proposed a substantial increase in the tax deduction for startup expenses, raising the allowable deduction for new small businesses from $5,000 to $50,000.
The Democratic presidential nominee announced the proposal during a speech in New Hampshire on Sept. 4 as part of her broader economic plan to make tax filing “cheaper and easier” for businesses, Forbes reported.
“As President, one of my highest priorities will be to strengthen America’s small businesses,” Harris said, according to CBS News. “We’re going to help more small businesses, and innovators get off the ground.”
New startups could either use the full $50,000 deduction in one year or spread it across multiple years as they become profitable. They also have the option to use the $5,000 deduction and spread the remaining startup costs over 15 years.
The proposal aims to ease the financial burden of starting a business, covering costs such as advertising, employee training, consultant and executive salaries, and travel. Harris is also targeting 25 million new small business applications in her first term if elected, compared to the 19 million reported by the Biden administration since President Biden took office.
In a Facebook post following the event, Harris wrote, “Small business owners and entrepreneurs are not just business leaders. They are civic leaders, community leaders, mentors, and inspirations.”
She added, “President Biden and I continue to invest in their dreams and ambitions as we support our nation’s small businesses at record rates.”
Harris’ economic plan also includes expanding the child tax credit, introducing tax cuts for the middle class, reducing grocery “price gouging,” and offering up to $25,000 in down payment aid for first-time homebuyers.
The vice president’s proposal was announced a week before her Tuesday night debate against former President Donald Trump, who has proposed extending existing tax cuts for businesses and individuals.
