Vice President Kamala Harris has put forward a proposal to significantly expand the tax deduction for small business start-up expenses, closely aligning with a Republican-backed policy that President Donald Trump supported during his administration. Harris’s proposal seeks to increase the deduction from $5,000 to $50,000, a move that echoes legislation introduced by Republicans six years ago.
In 2018, Rep. Vern Buchanan (R-FL) introduced a bill that aimed to raise the deduction to $20,000 as part of the “Tax Reform 2.0” package following the Trump tax cuts. The proposal passed the House with strong Republican support but faced opposition from most Democrats. The Trump administration argued that the increased deduction would be beneficial for small businesses across the country.
Currently, small business owners can deduct certain expenses such as advertising and salaries incurred before the business officially starts, but the deduction is limited to $5,000. Harris’s plan to increase this deduction tenfold is designed to provide greater financial flexibility to entrepreneurs.
Harris is expected to promote this policy during an event in New Hampshire, as part of her broader goal to see 25 million new small businesses launched during her first term. So far, President Joe Biden’s administration has overseen the creation of 19 million small businesses.
This proposal is part of Harris’s strategy to present herself as more business-friendly, particularly in light of criticisms that some of the Biden administration’s policies have been harmful to the economy. Recently, Harris also expressed support for eliminating the tax on tips for service workers, a policy originally proposed by Donald Trump. Additionally, she has adjusted her position on fracking, now opposing a ban that she previously supported.
