Democratic presidential candidate Kamala Harris pledged Wednesday to extend a $50,000 tax credit to restaurant startups and other small-business ventures if elected, a quantum leap from the current tax break of $5,000 for launches.
The current vice president also promised to slash the paperwork and red tape that can distract entrepreneurs from their struggles to turn a business idea into a success. For instance, she said, the tax-filing process for small businesses could be simplified both by shortening the forms they’re required to submit and factoring standard deductions into the computation of what they owe.
The concessions Harris spelled out during a campaign speech Wednesday in New Hampshire are part of her broader promise to foster the startup of 25 million small businesses during her first four years in the White House. That compares with the 19 million that have filed paperwork during the Biden administration to post a Now Open sign.
To achieve that goal, she said, her administration would expand entrepreneurs’ access to venture capital and business expertise. She did not say how that greater accessibility would be extended.
“We’re going to help more small businesses and innovators get off the ground,” the vice president said.
She noted that starting a small business usually costs about $40,000, or significantly less than the tax break she pledged to extend.
Harris’ promises were taken as a positive for the restaurant industry’s expansion.
“Policies like an increased startup tax deduction will help even more people open their dream restaurant,” Sean Kennedy, EVP of public policy for the National Restaurant Association, said in a statement.
But the praise was qualified: “We are equally focused on other ways Washington can drive industry growth, including extending the 199A deductions, restoring 100% accelerated depreciation deductions, and allowing for business interest deductions,” said Kennedy.
If the 199A deduction is extended, certain proprietors of a small business could continue to take a tax deduction of up to 20%. It’s due to sunset next year.
Harris contrasted her promises to small businesses with expectations that her Republican Party rival, Donald Trump, would pursue economic policies that favor large corporations and wealthy individuals. Yet Harris also pledged to reset the capital gains tax rate for individuals reporting more than $1 million in annual income at 28%, or significantly less than the 40% that President Biden proposed in his fiscal 2025 budget. The current rate, set during Trump’s presidency, is 20%.
Both candidates have courted restaurant workers by promising to end the federal taxation of tips as income.
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