Vice President Kamala Harris will announce Wednesday that she plans to increase the amount in tax deductions offered for startups by tenfold if elected president.
Small businesses, big price tag.
Vice President Kamala Harris will announce Wednesday that she plans to increase the amount in tax deductions offered for startups by tenfold if elected president — a policy experts say could cost Americans as much as $20 billion over the next decade.
The Harris plan, expected to be unveiled during a campaign stop in New Hampshire, would up the current $5,000 tax deduction for small businesses and their startup expenses to $50,000.
“This proposal would also allow new businesses to wait to claim that deduction until they first turn a profit in order to reduce their taxes,” a Harris campaign official said Tuesday.
Garrett Watson, a senior policy analyst at the nonpartisan Tax Foundation, told The Post that the plan would cost approximately $20 billion over the next 10 years.
The assessment was based in part on a provision from a 2010 federal law, the Small Business Job Creation Act, which upped the deduction of business expenditures for startups from $5,000 to $10,000, amounting to a total cost of $230 million over a decade.
However, the increased deduction sunset after one year and was not extended.
“Generally speaking, it’s better to allow startups the space to properly deduct costs from their revenue, including against future revenue, rather than disallowing deductions for expenses or requiring lengthy amortization of those costs,” Watson said.
Marc Goldwein, a senior policy director for the nonpartisan Committee for a Responsible Federal Budget (CRFB), affirmed the $20 billion ballpark cost.
