Kamala Harris’ campaign has significantly positioned economic and business policy as a fundamental aspect of their messaging. The focal points include strategies aimed at curbing inflation, supporting small businesses, and fostering economic growth through comprehensive top-down policies and federal aid initiatives. While a segment of experts endorses these plans as potentially transformative for the economy, skepticism remains among others regarding their feasibility, particularly as these proposals navigate the complexities of Congress. Many critics question whether such ambitious plans can truly materialize into effective strategies that benefit the broader population.

Over the past year, several key campaign promises have emerged from Harris, outlining her vision for economic reform and support for small businesses.

The Harris-Walz Stance on Small Businesses: A Commitment to Growth

Throughout her campaign, Harris has consistently highlighted the importance of small businesses, making numerous stops at local establishments since launching her campaign in August. Her dedication is palpable as she has made it clear that investing in and nurturing small businesses represents a critical priority for her administration.

“This is one of my singular priorities: to invest and grow our small business,” Harris remarked to the owner of Savannah café The Grey and Dottie’s Market during her visit. This assertion encapsulates her commitment to supporting the backbone of the American economy.

In her capacity as vice president, Harris has actively engaged with small business owners, advocating for mentorship programs and addressing the myriad challenges entrepreneurs face today, especially in light of rising costs, limited access to equity, and the reverberating impacts of the COVID-19 pandemic on local economies.

“To the small-business owners and entrepreneurs of America, including those here today: You are the backbone of our communities and of our economy,” she declared emphatically during a speech in August 2023. “And you are part of the pride of our nation.” Harris’s words serve not only to uplift but to galvanize collective action toward a more supportive business ecosystem.

The Harris-Walz Campaign and Plans for Small Businesses: Practical Solutions or Futile Promises?

A notable feature of Harris’s economic framework includes a proposal for $20,000 forgivable loans specifically targeting Black entrepreneurs. One of her primary concerns is to empower minority communities by promoting entrepreneurship and spurring economic activity within these demographics.

The campaign’s “Opportunity Economy” initiative is geared towards facilitating access to capital and resources that entrepreneurs need to successfully launch and grow their businesses. This initiative notably emphasizes its commitment to Black male entrepreneurs, aiming to create pathways to wealth and community strengthening.

Under this proposal, Harris has outlined that up to $1 million in loans would be made available to qualified Black entrepreneurs, with $20,000 in potential forgiveness provided through mentorship and training opportunities in high-demand industries, as well as proposed regulations for the digital economy, cryptocurrencies, and legalized marijuana.

This program holds the potential to substantially shift the landscape of entrepreneurship among minority groups, particularly considering the stark statistics that reveal only 8 percent of Small Business Administration (SBA) 7(a) loans and merely 3.6 percent of SBA 504 loans have been awarded to Black applicants, underlining a pressing need for equitable financial opportunities.

“If implemented as proposed, this could be a big help for diverse communities where small businesses have struggled or failed to attract interest,” comments Mark Hamrick, a senior economic analyst for Bankrate. “A program like this could help Black entrepreneurs find a path in starting a new business, perhaps owning the next big successful enterprise.” However, it’s crucial to also acknowledge the criticisms regarding potential racial discrimination claims arising from limiting these loans exclusively to Black entrepreneurs. Activists have signaled a willingness to challenge such policies legally if they are not extended to other minority groups, prompting the Harris campaign to clarify that these financial opportunities will be open to both Black men and other applicants.

Pros

• Black men can have more opportunities to start their own businesses.
• Areas in need can experience more economic activity.
• The business environment can become more diverse and inclusive.

Cons

• The policy may face litigation and scrutiny.
• It is unclear if the policy will apply to other minorities who may need financial assistance.
• The policy will only apply to startups, potentially leaving existing businesses without support.

Increasing Startup Expense Tax Deductions: A Game Changer?

Another crucial promise outlined in Harris’s campaign is raising the maximum startup tax deduction from $5,000 to a substantial $50,000. She asserts that the current limit is inadequate for entrepreneurs, especially those hoping to launch businesses with a diverse array of startup costs.

“Nobody can start a small business on $5,000,” Harris stated during a visit to Wisconsin-based Penzeys Spice shop. “What it does is allow people who have the ambition and the passion and the work ethic and the innovation to actually get a leg up.” This message resonates with aspiring business owners, reinforcing the notion that a larger tax deduction could facilitate significant financial relief.

A tax deduction of $50,000 has the potential to provide substantial support, particularly as the average startup cost hovers around $40,000, according to Shopify. This adjustment is seen as a strategic move to propel Harris toward her ambitious goal of fostering 25 million new startup applications throughout her first presidential term.

Nevertheless, the more valuable aspects of this proposal remain contested. It has been pointed out that an increase in the deduction may not be enough to assist the startups facing hardships, as the deduction only benefits profitable businesses. Given that many startups take several years before they turn a profit, the immediate impact of this initiative could be limited for those who could benefit the most. Moreover, existing businesses, which could similarly face financial challenges, would be excluded from eligibility under this new policy that targets only nascent enterprises.

Pros

• Businesses will have more funds reinvested into their operations.
• Startups would have better chances of covering their initial costs and achieving growth.
• More aspiring entrepreneurs might be inspired to take the leap into business ownership with increased support.

Cons

• The deduction would not extend to existing businesses that might need support.
• The tax relief would come after filing, meaning initial support is not readily available.
• Startups that have not yet turned a profit may not see immediate benefits from the deduction.

Directing Federal Funding to Small Businesses: A Strategic Investment

A pivotal aspect of Harris’ vision aims at generating 25 million new business applications within her initial term. She intends to achieve this goal by strategically allocating federal funds to support startups and small enterprises. A key strategy involves increasing the flow of federal contract funds directed towards small businesses, thereby catalyzing entrepreneurial growth across the nation.

The Harris campaign stresses that enhanced funding will open new avenues for growth. Many entrepreneurs feel the weight of obstacles, particularly rising inflation and labor costs, which have been identified as primary challenges for businesses in an August 2024 survey conducted by the National Federation of Independent Business. Increasing access to federal funding can help mitigate some of these pressures and empower entrepreneurs to thrive.

Nevertheless, some skeptics argue that these proposals may miss the mark by failing to address the underlying problems affecting small businesses, such as the alarming rise in operational costs and energy expenses, which continue to present significant barriers to success.

Pros

• Increased funding stream for small businesses’ operational needs.
• Fostering growth and stability can pave the way to entrepreneurial success.
• Motivating a new generation of entrepreneurs to take bold steps in establishing their businesses.

Cons

• Concerns remain whether this funding will genuinely solve key issues for small businesses.
• Specificity on how funds will be allocated remains unclear.
• Challenges may persist if core operational issues are not addressed comprehensively.

The Bottom Line: An Evolving Narrative for Small Businesses

The Harris/Walz campaign has made the support of small businesses a central theme of their presidential aspirations. Prominent promises include directing critical resources to minority entrepreneurs, significantly increasing tax deductions for startups, and enhancing the overall ecosystem for startups through targeted federal aid and funding. However, in the complex landscape of policy proposals, the implementation of these ideas remains to be seen, with opponents challenging the viability and fairness of such initiatives. As discussions unfold, technology aids like the AI legalese decoder can play a pivotal role in helping stakeholders understand the intricacies of policy proposals and navigate potential legal implications, providing clarity to small business owners and entrepreneurs who are eager to benefit from these initiatives.