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Vice President Kamala Harris has been arduous at work selling her fiscal concepts for small enterprise homeowners all through her short-lived presidential marketing campaign in 2024. And even earlier than securing the Democratic nomination, the present second-in-command has been vocal about her advocacy for small enterprise all through her vice presidency.
Within the weeks main as much as the election, she has introduced a number of proposals aimed to assist extra entrepreneurs get their operations off the bottom, and the way she plans on adjusting the tax code to be favorable for small companies.
Right here’s what you could know as a small enterprise proprietor if Harris wins the presidency in 2024.
A Harris Presidency and How She Goals to Help Small Companies
The Kamala Harris marketing campaign web site has a bit devoted to the small enterprise neighborhood, and what she goals to do along with her Alternative Financial system agenda. It consists of formidable targets like:
- Develop new enterprise functions to 25 million by the tip of her first time period
What this implies for SMBs: This might doubtlessly characterize not solely extra rivals in your trade, however extra individuals setting out on an entrepreneurial journey, lowering the accessible workforce to fill open job listings. Small companies face headwinds discovering certified staff, with 90% of enterprise operators making an attempt to rent reporting few or no certified candidates for the positions they have been making an attempt to fill, in response to the NFIB.
- Broaden the startup expense tax deduction for brand new companies from $5,000 to $50,000, and broaden homeowners’ means to make use of the deduction instantly
What this implies for SMBs: This might give aspiring entrepreneurs the enhance they should get began. The typical enterprise startup prices about $40,000, in response to Shopify. Nonetheless, critics say this doesn’t resolve the foundation situation of early enterprise failure: money stream. Many early companies don’t flip a revenue of their infancy, and if a enterprise folds earlier than changing into worthwhile, the deduction received’t be capable of be used. However for those who do make it to profitability, it may be a good way to cut back their tax burden.
- Develop a regular tax deduction for small companies
What this implies for SMBs: In the event you’re already in enterprise, you seemingly know the complications of submitting enterprise taxes, Harris’ plan might decrease your tax complications with a regular deduction. This isn’t a brand new idea as Hillary Clinton proposed this concept throughout her 2016 presidential marketing campaign. It’s estimated {that a} small enterprise spends 82 hours and $2,900 per 12 months on tax compliance, in response to the Taxpayer Advocate Service.
- Recapitalize the Treasury Division’s small enterprise financing program, the State Small Enterprise Credit score Initiative (SSBCI), geared toward entrepreneurs in rural America, center America, and underserved communities
What this implies for SMBs: In a July 2024 report, the SSBCI reported it accepted 3,600 companies for capital funding. 80% of these accepted have been companies with lower than 10 staff. Harris goals to proceed pushing extra funding into these packages to make sure small enterprise homeowners proceed getting the funding they could not in any other case be accepted for.
You’ll be able to learn extra about her small enterprise coverage breakdown right here (see web page 46).
How This Might Influence Your Small Enterprise
If Harris is the winner within the presidential marketing campaign in 2024, enterprise homeowners might doubtlessly see vital tax modifications. For instance, the 2017 Tax Cuts and Jobs Act signed in the course of the Trump administration would seemingly expire with out extension on the finish of 2025. The TCJA offers enterprise homeowners the power to deduct 20% of their prices earlier than their earnings “passes by way of” to their particular person returns. This has considerably benefitted small enterprise homeowners, however Democrats have slammed the TCJA as merely a means for enterprise homeowners to pay much less taxes.
Moreover, Vice President Harris has proposed elevating the company tax fee from the present 21% enacted by the TCJA to twenty-eight%. This can be a stroll again of her 35% proposal throughout her temporary presidential marketing campaign within the final normal election. The Harris marketing campaign says that is “a fiscally accountable solution to put a reimbursement within the pockets of working individuals.”
In the event you’re somebody seeking to begin a enterprise, the Harris marketing campaign appears to be like to be bringing some nice incentives. Nonetheless, for somebody that’s at present working a worthwhile enterprise, you might see the next tax invoice if Harris is the 47th President of the US.
Backside Line
A few of Vice President Harris’s proposals might have a major influence on your enterprise operations if she is elected president in 2024. You’ll be able to learn extra concerning the insurance policies she is working with right here.
We’re right here to provide the info of the US presidential candidates and their respective small enterprise insurance policies to make the most effective voting determination for you and your enterprise.