Vice President Kamala Harris recently proposed increasing the startup expense tax deduction from $5,000 to $50,000 to create an “opportunity economy.” The proposal aims to provide more support for small businesses and reduce bureaucratic hurdles. U.S. Sen. Cory Booker joined small business owners in Flint, Mich., for a roundtable discussion on the plan.
Dwayne Williams Jr., founder of VSpec 360, stressed the inadequacy of the current $5,000 credit for tech startups, noting that essential equipment like cameras alone can cost $6,000. State Sen. Kristen McDonald Rivet, a former small business owner, emphasized the critical need for accessible capital.
“I know that access to capital is something that people talk about in rooms, but it never actually flows into communities,” she said.
Harris’s startup tax deduction proposal
Booker highlighted that many small businesses fail due to a lack of initial capital.
He praised Harris’s plan to introduce a standard deduction for small businesses and streamline the process for obtaining multistate licensing. However, some business owners, like Dwayne Clemons of Classy Move Productions, pointed out the challenges existing businesses face. “As businesses are in their first five to 10 years, there are growing pains,” he said, stressing the need for access to capital to avoid straining personal credit.
While the roundtable showed widespread support for Harris’s initiatives, some economists argue that other proposed tax increases could outweigh the potential benefits. The Tax Foundation estimates that Harris’s overall economic agenda, which includes raising the corporate tax rate to 28%, could reduce long-term GDP by 2% and result in the loss of 786,000 jobs over the next decade. Despite these concerns, Harris remains committed to supporting 25 million new small business applications during her first term, surpassing the 19 million applications filed under President Joe Biden’s administration.
The proposed increase in the startup expense deduction is just another part of her broader “Opportunity to Get Elected Agenda.”
