Entrepreneurs are applauding Vice President Kamala Harris’ plan to boost small businesses, but advocates say it’s the epitome of a larger fight over the tax code.
Harris filed on Wednesday policy proposals aims to catalyze the growth of small businesses and create more leverage on their balance sheets through several mechanisms. These include expanding the tax deduction for start-up costs from $5,000 to $50,000, removing barriers for owners and their employees to obtain or transfer professional certifications, and creating a fund for community banks to expand entrepreneurs’ access to capital.
“It would all be beneficial,” said Sherman Kyse, chef and owner of Dem Dam Burgers, a Biloxi, Mississippi-based eatery.
Courtesy Sherman Kyse
Others in the small business community are anxiously awaiting next year, weighing how the gains from Harris’ proposal will compare to those lost through deductions under former President Donald Trump’s signature tax law. it ends at the end of next year. Whether Harris or Trump wins, they will likely face an uphill battle to pass changes to the tax code through a potentially divided Congress.
Meanwhile, a speech on Thursday Aiming to tighten his economic policy, Trump again promised to cut tax rates for businesses and corporations.
Richard Trent, executive director of the Main Street Alliance, said Harris’ proposal addresses many economic concerns for the organization’s 30,000 nationwide membership, but he also looks ahead to 2025.
“This is just scratching the surface of what we need to do to protect local economies and small business owners in an environment where corporate consolidation makes our nation’s biggest businesses more powerful than ever,” he said. For example, he wants to see grants from the Small Business Administration expanded so that entrepreneurs with shallower pockets can be more competitive.
Aching for a push
For his part, Kyse, who said he plans to vote for Harris, said money in addition to the startup discount could help support wages, better food distributor contracts and warehouse space.
“My pop’s warehouse is completely full of restaurant equipment,” he said.
His business has faced some tough choices lately. Despite being ranked second best burger in a major local newspaper coast, Kyse, 43, said grocery inflation and price-conscious customers have forced him to downsize both his restaurant and menu items, including pasta and seafood nachos. As of 2020, it has closed three more locations along Mississippi’s Gulf Coast.
Revenue for 2024 is about $257,000, up from $360,000 this time last year, he said.
“I’m in the process of restructuring my menu so they can see the cheaper items on the value side,” said Kyse, who said this was his 30th menu update. For the latest version — after hearing feedback that some of the items were too expensive — Five Guys went so far as to move the menu prices, “and nobody said anything.”
With two months to go before his meeting with Trump on Election Day, Harris is racing to hammer out more details for his economic agenda. His small business proposals come on the heels of plans to build millions of new homes and a pledge to crack down on rising grocery prices.
Lobbyist and organizer Rhett Buttle, a former economic adviser to both President Joe Biden and Harris, said the proposal showed Harris’ “deep commitment” to entrepreneurs. He also noted Biden’s promise to expand the State Small Business Loan Initiative, which was established with funding, which he said was an obvious proposition for red states as well. America’s Rescue Plan and added, “A favorite of Republican governors.”
“There are broad strokes here for people from all walks of life,” he said. “Small business and entrepreneurship are great unifiers in a world where people have sharply different political divides.”
Deductions and deductions
If Harris wins, it will be important for many in the business community to see how his agenda clashes with tax code owners and entrepreneurs, including some of the provisions in the Trump-era legislation.
Brad Close, president of the National Federation of Independent Business, noted the popularity of Trump’s 2017 law among business owners. deduct 20% of their qualified business income when calculating their taxes. “If the cut is allowed to expire at the end of next year, millions of small businesses will face massive tax increases,” he said.
Literally pass-through deduction has been criticized As one of the most expensive parts of the tax code, according to preliminary estimates a It cuts $414.5 billion According to the Joint Committee on Taxation, within ten years. Extending the policy beyond 2025 would cost the government $684.2 billion through 2034, according to the Congressional Budget Office found. Last month, the nonpartisan Penn Wharton Budget Model said Trump’s overall proposals would increases the deficits by five times what Harris would have.
Harris’ small business plan is the latest example of the fine economic line he must walk after rising to the top of the ticket — appeal to broad moderate voters by using populist policies to encourage wealth creation for the wealthiest Americans. the poorest.
Charlotte Chase, 33, doesn’t need much convincing. He already plans to vote for Harris, and the latest bid includes a series of funding wins for his two-year-old company, BreakIntoTech, which sells video courses for professionals to get certified in data analytics.
The larger tax cut will help expand Chaze’s staff beyond the current four. And he welcomes Harris’ plan to tax long-term capital gains at 28% — lower than Biden’s 39.6% proposal but higher than the current 20%.
“As a small business owner who is successful but not enough for the capital gains policy to affect me or my business, this policy will help shift wealth away from people who have more than they could ever spend, meaning I can afford more of my human product,” said Chaze, along with his competitors. he added that he resisted price increases. “Believing in people rather than profit is good karma.”