Kamala Harris' focus on small businesses: Her plan to create jobs

On Wednesday, Vice President Kamala Harris announced her Entrepreneurs & Innovators Policy Plan, which is designed to support small businesses, entrepreneurs, innovation and economic growth. As previously reported, the Vice President has long advocated for supporting small businesses and entrepreneurs throughout her career.

Her campaign announcement during a speech in North Hampton, New Hampshire, at Throwback Brewery, a women-owned business that has been in business for more than a decade, gives us a better insight into her priorities for small businesses, entrepreneurs, and innovators. The Biden-Harris administration has prioritized Main Streets across the country through legislation and executive orders. These efforts have resulted in 19 million new business applications registered since the Biden-Harris administration began, an unprecedented number. Small businesses have also created 70% of net new jobs in the U.S. since 2019.

Vice President Harris' plan is to build on that success by setting a goal of 25 million new small business applications during her first term. Here are the policy proposals to achieve that goal:

Tax deductions

On average, it takes about $40,000 to start a small business, including market research, advertising, equipment, and salaries for trainees. However, the tax deduction for startup costs is currently $5,000. Vice President Harris' plan would expand that deduction to $50,000 for new small businesses to cover more of those costs and provide more flexibility in when and how they can claim it. For example, if they wait until they're making a profit, the deduction may be more beneficial to businesses at that time.

In addition, she has proposed a set of standard deductions for small businesses when filing taxes. It is estimated that one in three small business owners spends more than a week on their tax returns, and two in three spend at least $1,000 annually on them. A standard deduction in the tax code similar to that for individuals can save even the smallest businesses time and money.

Extended contract options

Vice President Harris also pledged that one-third of all federal contracts will go to small businesses during her first term by expanding contracting opportunities for rural and other underserved small businesses. The Small Business Administration's current goal is to have 23% of major government contracts go to eligible small businesses, so this would be a significant increase. That represents more than $20 billion in revenue for small businesses.

Expansion fund for small businesses

One challenge facing underserved main streets and communities is the difficulty of raising capital. This is exacerbated by the time it takes for a small business to generate the revenue needed to make initial loan payments. Vice President Harris' plan seeks to address this problem by establishing a Small Business Expansion Fund that community banks and Community Development Financial Institutions (CDFIs) will use to cover interest costs as small businesses expand. This fund will provide access to affordable capital to small businesses seeking to locate, innovate, and create jobs in communities across the United States. It also builds on the State Small Business Credit Initiative (SSBCI) 2.0, which was part of the American Rescue Plan, which provided funding to states, territories, and eligible communities to expand existing government small business investment programs or create new ones.

Less burdensome regulations

The vice president has also proposed measures to reduce red tape for small business owners, including making it easier for workers and companies to obtain professional licenses across state lines. In addition, her plan would create incentives for states and local governments to reduce burdensome regulations for small businesses, such as simplifying business licenses, zoning procedures, and building, road and health permits.

Several of the policy proposals she outlined have already been supported by Democrats and Republicans. With that in mind, it's refreshing to see her already laying out her plans to create jobs across the country, and it's significant that a presidential candidate is developing a targeted strategy to support the small businesses that play a critical role in our economic growth.