Kamala Harris Proposes Major Tax Relief for New Small Businesses in Bid to Boost Middle-Class Support

Vice President Kamala Harris proposes a $50,000 tax deduction for new small businesses, a key element of her economic strategy aimed at middle-class Americans as she campaigns for the presidency.

Key Points

• Kamala Harris will propose a tenfold increase in the startup expense tax deduction for new small businesses, raising it from $5,000 to $50,000.
• The proposal is part of Harris’ broader economic agenda to support middle-class Americans by taxing wealthier individuals and increasing federal funding for social programs.
• Harris aims to create 25 million new small business applications during her first term, surpassing the 19 million under Biden.
• The plan also includes easier access to occupational licenses, standardized tax deductions for small businesses, and a small business expansion fund.
• Harris’ proposals are expected to face opposition from corporations, Congress, and economic advisers aligned with Donald Trump.

In a bold move to court middle-class voters, Vice President Kamala Harris is set to propose a significant increase in tax relief for new small businesses. On Wednesday, Harris will unveil a plan that would expand the startup expense deduction from the current $5,000 to $50,000, marking a tenfold increase aimed at easing the financial burden on entrepreneurs. This proposal is the latest in Harris’ progressive economic agenda as she campaigns for the presidency, seeking to distinguish herself from her Republican opponent, Donald Trump.

The plan, which Harris will announce in New Hampshire, is designed to appeal to middle-class Americans by supporting small businesses—a vital component of the U.S. economy. According to the Small Business Administration, small businesses employ about 46% of all private sector employees and have been responsible for 70% of net new jobs since 2019. With the average cost of starting a new business estimated at $40,000, the proposed deduction could significantly ease the financial challenges faced by entrepreneurs.

In addition to the expanded deduction, Harris’ plan includes several other measures aimed at bolstering small businesses. These include a standardized tax deduction for small businesses, streamlined processes for obtaining occupational licenses across the country, and the creation of a small business expansion fund to help community banks cover interest costs. A campaign official, speaking on condition of anonymity, indicated that these initiatives are part of Harris’ broader strategy to contrast her economic policies with those of Trump, who has focused on tariffs and tax cuts for corporations.

Harris’ economic platform also emphasizes taxing wealthier individuals and companies more heavily, along with increased federal funding for social programs such as child care. These proposals are likely to face resistance from corporations and Congress, which has previously rejected similar initiatives put forth by President Joe Biden.

During a speech last month, Harris outlined her commitment to cutting taxes for most Americans, banning “price gouging” by grocery stores, and increasing the availability of affordable housing. On Wednesday, she is also expected to announce a goal of generating 25 million small business applications during her first term—an ambitious target that surpasses the 19 million applications seen during Biden’s presidency.

However, Harris’ proposals have drawn criticism from Trump’s economic advisers, Kevin Hassett and Stephen Moore, who argue that her policies could exacerbate inflation and harm the economy. This criticism is expected to be a key focus during the upcoming September 10 debate between Harris and Trump, where economic issues will be at the forefront.

As the campaign unfolds, Harris’ plan to support small businesses and middle-class Americans will be closely scrutinized, particularly in the context of rising prices and economic challenges. Whether her proposals can gain traction in Congress and with the broader electorate remains to be seen, but they underscore her commitment to reshaping the economic landscape in favor of working families and small business owners.