Democratic presidential nominee Vice President Kamala Harris campaigned in New Hampshire on Sept. 4, focusing on tax cuts for new small businesses.
Harris told voters that if elected, she would introduce a $50,000-tax cut for small business startups. Brandon Arnold, executive vice president of the National Taxpayers Union, told NTD that he agreed with her proposal.
“She seems to be tacking more toward the center, and I do think this expanded tax deduction would benefit small businesses and startups,” Arnold said. He said the apparent move to the middle is likely to “resonate with American voters who want to see more small businesses, more vibrancy in the small business community, more startups, and more companies coming online.”
However, Arnold raised concerns about the potential cost of Harris’s tax plan, saying it would bear a “hefty price tag.” He warned that it could cost tens of billions of dollars.
“Obviously, we have a $35-trillion-or-so national debt, so when you make proposals like this to lower taxes, I think the fiscally responsible thing to do is to provide ways to pay for it—ideally in the form of reducing other programs and unnecessary spending in the federal government,” Arnold said.
“I doubt she’ll do this because this is a presidential campaign and she doesn’t want to make those tough choices, but it would be nice to see some more fiscal responsibility and a movement toward a more balanced federal budget.”
Arnold also reflected on the Tax Cuts and Jobs Act (TCJA) introduced by former President Donald Trump in 2017, which he said provided “a huge boost for the economy.”
The act permanently reduced the corporate tax rate from 35 to 21 percent, a significant change aimed at increasing American businesses’ global competitiveness.
“We’ve seen almost the phenomenon of corporate inversions—where companies moved their headquarters or certain operations overseas—basically disappear, and we’ve seen more corporate activity as well as small business activity here,” Arnold said.
He said he thought Harris’s small business tax plan has a lot of merit, but that Trump’s plan was better because it created a 20-percent deduction for small businesses. Arnold said the Trump plan had been particularly helpful for pass-through entities that pay taxes on the individual schedule rather than on the corporate schedule, while also lowering corporate rates.
He suggested Harris should consider some of the components of Trump’s plan. “I know she doesn’t want to do anything that is remotely close to what Trump did, but when it comes to cutting taxes for small businesses, that ought to be a bipartisan endeavor,” he said.
While the corporate tax cuts were permanent, many of the individual tax cuts—including the lower tax rates and the higher standard deduction—are set to expire at the end of 2025 unless extended by future legislation.
Arnold expressed his hope that whoever wins the presidency will continue to support small businesses.
“Those small business provisions will expire in their entirety at the end of 2025,” he said. “It’d be nice to see some leadership from both the left and the right on making sure our small business community is vibrant and can compete.”