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Entrepreneurs Support Vice President Kamala Harris’ Small Business Initiatives

Entrepreneurs across the nation are expressing enthusiasm regarding Vice President Kamala Harris’ recent plans aimed at invigorating small businesses. However, advocates within the small business community caution that these proposals could usher in a more significant clash surrounding the intricacies of the tax code.

New Policy Proposals for Small Business Growth

On Wednesday, Harris introduced a series of policy proposals designed to stimulate small business growth and alleviate some financial pressures on their balance sheets. The proposals include notable initiatives such as increasing the tax deduction for startup expenses from $5,000 to a substantial $50,000. Additionally, her plans involve removing obstacles that prevent owners and their employees from obtaining or transferring occupational certifications, as well as launching a new fund aimed at empowering community banks to enhance entrepreneurs’ access to necessary capital.

Chef Sherman Kyse, who is also the owner of Dem Dam Burgers, a popular eatery in Biloxi, Mississippi, commented positively on these proposals. “All of that would be beneficial,” he stated, reflecting the optimism shared by many small business owners.

Sherman Kyse, owner of Dem Dam Burgers in Biloxi, Miss. courtesy of Sherman Kyse

Concerns Over Potential Tax Code Changes

While many in the small business community are hopeful, there are looming concerns as they look toward the upcoming year. They are weighing the potential positive impacts of Harris’ proposals against the potential losses associated with the expiration of deductions established under the tax reforms signed by former President Donald Trump, which are set to lapse at the end of the next year. Whichever candidate prevails in the upcoming election, they will likely have to navigate the complexities of a potentially divided Congress when advocating for changes to the tax code.

In a recent speech, Trump reiterated his commitment to reducing tax rates for businesses and corporations, indicating that the tax code will be a pivotal issue in the campaign.

Richard Trent, executive director of Main Street Alliance, articulated that while Harris’ proposals do address several economic concerns within the organization, which represents 30,000 members across the country, he remains focused on the overarching needs for 2025 and beyond. He remarked, “It’s just scratching the surface of what we need to do to ensure that local economies and small business owners are protected in an environment where corporate consolidation has made the largest businesses in our country more powerful than ever before.” One of his key suggestions is to expand cash grants via the Small Business Administration, allowing entrepreneurs with limited finances to compete more effectively.

The Need for Support

A Closer Look at Kyse’s Situation

Kyse, who plans to throw his support behind Harris, emphasized that the additional funds stemming from the increased deduction could significantly impact his business. Specifically, he sees it as an opportunity to bolster payroll and secure more favorable contracts with food distributors, as well as rent for warehouse space—an ongoing monthly expense he’s currently avoided. "My pops’ shed is completely filled with restaurant equipment," he commented, signaling the pressing need for more space.

Despite receiving accolades—his restaurant placed second in a local publication’s “best burger on the coast” rankings—Kyse has faced difficult decisions regarding his business. He has had to scale back his restaurant operations and menu selections, a challenging feat compounded by rising grocery inflation and customers being increasingly price-sensitive. Since 2020, he has closed three locations along the Mississippi Gulf Coast. For the year 2024, his projected revenue is around $257,000, a notable drop from the $360,000 he achieved previous year.

"I’m in the process of restructuring my menu to let them see the cheaper stuff on the value side," Kyse shared, noting this is not his first time revamping the menu—this marks the 30th iteration. He also disclosed that in response to customer feedback about high prices, he even modeled some pricing after Five Guys, stating, “and nobody said nothing.”

Harris’ Economic Agenda

As the countdown to the Election Day showdown with Trump continues, Harris is hastily working to flesh out further details of her economic agenda. Her recent small business initiatives align with her broader plans, including the construction of millions of new homes and a commitment to combat grocery price-gouging.

Rhett Buttle, founder and CEO of Public Private Strategies and former economic adviser to both President Joe Biden and Harris, commended the proposals. He underscored Harris’ "deep commitment" to supporting entrepreneurs and highlighted her appeal to more conservative states, pointing to her intention to expand the State Small Business Credit Initiative, a program bolstered by funding from Biden’s American Rescue Plan and welcomed by Republican governors. "There are broad strokes here to people from all walks of life,” Buttle said, emphasizing that small business and entrepreneurship serve as common ground in a politically diverse landscape.

The Tax Code Debate: Deficits and Deductions

Should Harris win the presidential race, it will be crucial for those in the business community to assess how her agenda integrates with elements of the tax code that are currently favored by entrepreneurs. Brad Close, president of the National Federation of Independent Businesses, highlighted the widespread support among business owners for Trump’s 2017 tax law that enables them to deduct 20% of their qualified business income when calculating taxes. He cautioned that if this deduction were to expire next year, millions of small businesses would face significant tax increases.

Critics have labeled the pass-through deduction as one of the more costly components of the tax code, with initial projections indicating a potential deficit of around $414.5 billion over a decade according to the Joint Committee on Taxation. Recent analyses from the nonpartisan Penn Wharton Budget Model suggested that Trump’s tax proposals could exacerbate deficits five times more than Harris’ plans would.

Harris’ strategy for small businesses exemplifies the careful economic balancing act she has maintained since stepping to the forefront—enticing a diverse array of moderate voters with populist measures targeting the ultra-wealthy to catalyze wealth creation among the less affluent population.

Charlotte Chaze, a 33-year-old entrepreneur, is already convinced. She has expressed unequivocal support for Harris, as the recent proposal aligns with several financial benefits for her two-year-old venture, Break Into Tech, which provides professional video courses for obtaining certifications in data analytics.

Charlotte Chaze, founder and CEO of Break Into Tech in Philadelphia. courtesy of Charlotte Chaze

The Impact of Tax Policies on Small Businesses

Chaze believes that an increase in the tax deduction would empower her to hire additional employees beyond her current staff of four. She expressed satisfaction with Harris’ plan to implement a 28% tax on long-term capital gains—lower than Biden’s proposed 39.6% but still higher than the existing 20%. "As a small business owner who is super successful but doesn’t make enough for the capital gains policy to affect me or my business, that policy will help transfer wealth away from people who have more than they could ever spend, meaning more people will be able to afford my product," said Chaze. She emphasized her commitment to maintaining fair pricing, stating, “It’s just good karma to believe in people over profits.”

How AI legalese decoder Can Assist Small Businesses

Navigating the complexities of tax codes and legal regulations can be daunting for small business owners. This is where tools like the AI legalese decoder come into play. This innovative AI-based tool can help entrepreneurs and small business owners demystify complicated legal and tax terminology, making it easier for them to understand their rights and obligations under current laws.

By providing simple, clear explanations of complex legal language, the AI legalese decoder empowers small business owners to make informed decisions regarding tax deductions, compliance, and the implications of new policies. Such clarity not only saves time but also helps entrepreneurs like Kyse and Chaze to strategically plan their business growth in the face of upcoming changes in the tax landscape. In a climate of uncertainty, having access to understandable legal information is invaluable for small business success.

In conclusion, as the small business community engages with the prospect of new policies and a shifting tax landscape, tools that simplify complex legal jargon will be essential in ensuring that entrepreneurs can effectively navigate the opportunities and challenges they face.

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