Vice President Kamala Harris has introduced a new small-business tax proposal as part of her “Opportunity Economy” platform, aimed at boosting entrepreneurship by significantly increasing the tax deduction for startup costs—from $5,000 to $50,000. While Harris describes the move as a much-needed tax break for entrepreneurs, conservative economists are not convinced and have voiced strong opposition to the plan.
Critics argue that the proposal’s benefits are undercut by Harris’ broader tax agenda, which includes raising marginal tax rates for both corporations and individuals. E.J. Antoni, a conservative economist, argued that these higher taxes would diminish any potential gains for small business owners. “She’s giving a tax break with one hand but taking away with the other through higher taxes,” Antoni explained. The concern is that these conflicting policies could create more challenges for small businesses rather than helping them get off the ground.
Economists also point out that the $50,000 startup deduction mainly benefits larger startups with significant early-stage expenses rather than smaller ventures that typically have lower costs when launching. Richard Stern of The Heritage Foundation noted that many startup expenses are already deductible under current tax laws, leaving questions about how much the new proposal would truly impact new business owners.
Despite the pushback, Harris supporters argue that the tax break is a critical step toward fostering innovation and entrepreneurship. Robert Wolfe, a Harris ally, emphasized that the plan supports small businesses, which are the backbone of the economy. He argued that the tax increases will primarily affect individuals making over $400,000, leaving small business owners unaffected.
However, with the proposal also linked to Harris’ push to raise taxes on larger businesses, conservative critics worry that this approach could hurt job creation and slow down economic recovery. With conflicting viewpoints, the debate over whether Harris’ small-business tax plan will provide meaningful support to entrepreneurs continues to unfold.
