Harris Proposes Major Small Business Tax Deduction Increase

Kamala Harris is advocating for a tenfold increase in the small business tax deduction for startup expenses. This strategic move comes as she competes with Donald Trump to reassure voters about the economy. The proposal, revealed by a Harris campaign insider, seeks to raise the deduction from $5,000 to $50,000. The campaign argues that this amount aligns with the average $40,000 cost of launching a small business.

High-Stakes Tax Policy Rivalry

This initiative marks the latest exchange in a high-stakes tax policy rivalry between Harris and Trump, the Republican contender. The next president will play a pivotal role in reshaping tax policy as Washington gears up to revise the tax code next year. Several tax cuts are set to expire in 2025, and both candidates are promoting ambitious proposals that could significantly impact tax burdens and entail substantial costs.

Harris and Trump’s tax proposals could reshape policies and impact taxpayers significantly, according to wsj news.

Harris’s Broad Policy Agenda

Harris’s new proposals are part of her broader policy agenda, introduced shortly after she took over the Democratic ticket from President Joe Biden. With the election just two months away, she has committed to making middle-class protection a cornerstone of her “Opportunity Agenda,” focusing on shielding households from rising costs. However, critics have pointed out that her plans lack detailed specifics.

Goals for Small Business Expansion

Harris plans to unveil her small business tax deduction proposals in a speech in New Hampshire on Wednesday. She aims to achieve 25 million new small business applications during her first term. This target is up from a record 19 million under Biden, according to campaign sources. To reach this goal, she will propose reducing bureaucratic obstacles for startups. She plans to introduce a standard deduction to simplify tax filing.

Support for Small Business and Regulatory Reform

Harris will also advocate for reducing barriers to occupational licenses, which hinder workers from practicing their trades across state lines and limit business expansion. Additionally, she will encourage state and local governments to ease regulatory challenges. Her plans include launching a small business expansion fund to enable community banks to cover interest costs for emerging enterprises, especially in historically underfunded regions

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Trump’s Tax Policy and Economic Platform

If Harris assumes the presidency, she will need to address small business taxation in her first year. A 20% deduction for pass-through businesses is set to expire at the end of next year. This tax break, part of Trump’s 2017 tax overhaul, will expire unless Congress renews it. Trump’s tax cut pledge remains central to his populist economic platform. This pledge garners support from many business leaders.

Impact on the 2024 Election

The economy is a critical issue in the 2024 race, with households struggling with high prices despite Biden’s infrastructure investments. Harris’s economic proposals aim to address these concerns, while Trump links her to Biden’s poorly rated economic management. Trump attempts to associate Harris with Biden’s economic management, which has received poor ratings from voters. Harris has introduced measures to assist first-time homebuyers and reduce rent and grocery costs.

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