WASHINGTON — Vice-Chairman Kamala Harris plans to propose a tenfold increase in federal tax credits for small business startup costs on Wednesday, from $5,000 to $50,000, hoping to spur a record 25 million new small business filings during her four-year term if she wins the presidency in November.
She will unveil the plan at a campaign rally in New Hampshire’s Portsmouth region, a rare departure from the Midwest and Sunbelt battlegrounds the Democrat has targeted in her race against the former Republican president. Donald Trump.
A Harris campaign aide, speaking on condition of anonymity to discuss a policy plan that has not yet been made public, said Tuesday that the change would cover the $40,000 it costs on average to start a business. The proposal would allow new businesses to wait to claim that deduction until they first turn a profit, to better maximize its impact on reducing their taxes.
Such changes would likely require congressional approval. But a series of tax cuts approved during the Trump administration are set to expire at the end of next year, creating a scenario in which lawmakers may be ready to consider new tax measures. The proposal could help Harris show her support for entrepreneurs, even as she has called for higher corporate tax rates.
Since the president Joe Biden fallen his re-election bid and supported Harris In July, the vice president focused on campaigning in the “ blue wall “states of Michigan, Wisconsin and Pennsylvania that have been the linchpins of Democratic campaigns that have won the White House in recent decades.
She has also made frequent visits to Arizona, Nevada and Georgia, all of which Biden narrowly won in 2020, and North Carolina, which last voted Democratic in a presidential race in 2008 but which she still hopes to win against Trump. Biden won New Hampshire by 7 percentage points in 2020, though Trump came much closer to winning it against Hillary Clinton in 2016.
“The cost of living in New Hampshire is sky-high, energy bills are among the highest in the country and the housing market is the most unaffordable in history,” Trump posted on his social media platform last week.
Harris’ team says that securing 25 million new business filings in four years, if she wins the White House, would surpass the roughly 19 million such filings that have been made since Biden took office. And that was millions more than the previous four years under Trump. The vice president’s goal would be to set a record for new small business filings — but records only go back about 20 years.
Applications to start a business don’t always lead to the creation of small businesses. Still, Harris’ plan could prevent new small businesses that do flourish from taking on more debt, which could help them more in a time of high interest rates.
In the weeks since Harris took the lead on the Democratic ticket, she has offered relatively few major policy proposals, attempting to political balance between injecting new energy into the race and continuing to support many of the Biden administration’s proposals she helped champion as vice president.
Harris’ small business plan follows her announcement last month on proposed steps to combat inflation by working on lower prices for groceriesand to use tax cuts and other incentives to encourage homeownership. The vice president has also proposed ending federal taxes on tips for service workers, an idea Trump first floated.
The plan she introduces Wednesday also calls for creating a standard deduction for small businesses, intended to save their owners time filing taxes, and making it easier to obtain professional licenses — allowing people to work across state lines and businesses to expand into new states. Harris also wants to provide federal incentives to get state and local governments to relax their regulations.
In an effort to spur business investment outside urban and suburban hubs, Harris is pledging to launch a small business expansion fund to allow local banks and federal entities to cover interest costs as small businesses expand or otherwise create jobs. Her team says that effort will focus primarily on areas that traditionally receive less investment.
