Conservative economists are critical of Vice President Kamala Harris’ new proposal aimed at reducing startup costs for small businesses. Harris announced new tax proposals last week, including a substantial increase in the standard tax deduction for small-business startup costs from $5,000 to $50,000. While Harris believes this is a tax cut that will help small businesses get off the ground, critics argue that her plans to raise marginal tax rates for corporations and individuals would negate the benefits of the increased deduction. They point out that under former President Trump’s administration, standard deductions were increased and marginal tax rates were lowered for small business owners.
Supporters of Harris argue that increasing tax rates for individuals making over $400,000 will not have a significant impact on small business growth. They praise Harris for her commitment to providing tax credits to small businesses and entrepreneurs, especially during the early stages of starting a new company. However, critics argue that current tax laws already allow new business owners to deduct most early-stage expenses, and that the startup expenses eligible for deduction are typically minimal according to the tax code. They suggest that Harris’ new tax deduction may disproportionately benefit larger starting businesses.
Critics also question the effectiveness of Harris’ economic policy, suggesting that it appears to be haphazardly thrown together without proper planning. They argue that while Harris may be giving with one hand by providing tax deductions for small businesses, she is taking away with the other hand by raising taxes in other areas. Despite the criticism, supporters like Roger Hochschild, a former CEO at Discover Financial Services, believe that Harris’ tax proposal for small businesses will be critical to further economic growth. They argue that Harris understands the importance of small businesses as the backbone of the economy.
In addition to her small-business tax proposals, Harris has also laid out plans to increase the capital gains tax to 33%. This is higher than Biden’s reported plan to nearly double the current rate of 23.8%. While some critics see Harris’ economic plan as a collection of populist gimmicks, her supporters, like former 2020 Biden campaign adviser Rhett Buttle, believe that her proposals show a deep commitment to supporting entrepreneurs. Harris has also faced criticism for her understanding of inflation and business attacks ahead of her policy speech, with some calling her behavior “lunatic.” Critics argue that her tax proposal for small businesses may do little to help inexperienced business owners start their first company.
Overall, the debate surrounding Vice President Kamala Harris’ small-business tax proposal highlights the contrasting views of conservative economists and supporters regarding its potential impact on economic growth. While critics argue that the proposal could be diminished by other tax increases and may disproportionately benefit larger businesses, supporters see it as a crucial step towards driving economic growth and supporting entrepreneurs. Harris’ commitment to small businesses and entrepreneurs is praised by some, while her economic policy is criticized for lacking proper planning and coherence.
