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Kamala Harris to propose up to $50,000 tax deduction for new small businesses

Vice President Kamala Harris will propose a tax deduction of up to $50,000 for new small businesses on Wednesday, a tenfold increase over existing relief and her latest economic policy aimed at winning over middle-class Americans after jumping into the presidential race over a month ago.

Drusas ,

I will never understand how politicians crow about how small businesses and entrepreneurship are what the US needs and then simultaneously complain that there's a shortage of workers. Maybe not every business is inherently virtuous simply by existing, and if there aren't enough workers, that could mean there are too many businesses.

bobs_monkey ,

One of the best ways someone can make a good living for themselves is to run their own business. Not that it’s for everyone, but being in the driver’s seat of your own income instead of depending on someone else for a wage is very much the definition of American individualism, even if an individual is simply contracting for a larger firm.

I don’t think there’s necessarily a shortage of workers, but I think there’s a shortage of people willing to work for the peanuts these conglomerates are offering. Competition is severely hampered when large firms corner their respective markets and drive out smaller competitors, because now they are the ones in charge of the respective workforces and are calling the shots, including how much an individual is allowed to make. Smaller firms with lower overhead are able to disrupt them, as long as the playing field is level and the barriers aren’t the Dover cliffs.

cogman ,

You know what would really help small businesses, like a lot? Public health insurance (covering things like vision and dental). A huge part of the cost of doing business is benefits for employees. Well, with public health insurance that’s a huge budget item that suddenly small businesses don’t have to pay.

Want to make it better? Expand social security to be something you could live off of. Boom, now you as a small business owner don’t need benefits like 401ks. Your employees will be well taken care of by a government ran pension.

Want to go a step further? Expand public housing, public transport, and food security programs. Now all the sudden a business doesn’t need to pay top dollar because the cost of living for everyone has been significantly decreased. You can easily find low wage workers and hire crews of them because the added income for everyone is more of a bonus rather than a necessity.

What else could you do? Reduce the full time work week from 40 hours to 30 hours. For a small business, it means you can actually focus on having your employees doing useful work rather than having them hang around an extra 10 hours a week doing nothing. For the employees, now they have spare time on their hands which means more opportunities to interact with the community and small businesses.

By taking care of the basic needs of the population you give the population a lot of spare capital and time. All of which can stimulate the economy to new heights.

banshee OP ,

Nailed it.

fine_sandy_bottom ,

Of course all of these things would be nice, but I just don’t think it’s an electable platform in 2024.

It’s not based in reality, but the “biden broke the ecomony” narrative has a lot of traction.

This type of policy would lose more votes than it would win.

hemmes ,
@hemmes@lemmy.world avatar

Dam, you both sound right. And that’s some sad shit to realize.

cogman ,

We can both be right. My goal is showing how appealing government spending can be and is generally. The more people thinking this way, the more palatable “you know what, maybe we should have a 1000% tax on private jet and yacht fuel”.

Raising taxes on multimillionaires/billionaires should be a lot more popular than it currently is.

hemmes ,
@hemmes@lemmy.world avatar

That’s because half the population actually believes they’ll be as rich as those high tax brackets (which will never happen).

Serinus ,

Agreed. We should stick to the public healthcare first, and revisit others in 15-20 years.

I’m kind of surprised public healthcare hasn’t already been pitched in this way. Hell, that $50k should be a medicare credit.

Rookwood ,

We don’t need more small businesses. We need less corporations, less ultra wealthy and more healthy middle class. This does not solve anything and a one time tax deduction doesn’t make small businesses sustainable when they have to compete against corpos.

mean_bean279 ,

Having more small businesses is how you get less corporations and a healthier middle class… there’s a ton of great incentives for small businesses already, but the hardest part is the initialization and the first year. This makes that way easier. This is a good idea, you just have a bad view.

Steve ,

You and @Rookwood are both right.
On one side, helping small business get started is good.
The other side, breaking up monopolies and market manipulators is also needed.

wintermute_oregon ,

The default for acquisitions should be no. Too many large companies buying small companies.

bassomitron ,

Thank you. I can’t believe there are multiple comments in this thread hating on small businesses and somehow justifying that as them being anti-corpo/wealthy elite. We need less Walmart/Amazon/etc and more smaller, locally owned and run businesses.

IHeartBadCode ,

Having more small businesses is how you get less corporations and a healthier middle class

Except when the corporations just buy the small business. This is the big problem with breaking into an industry. If you do find a way to break in, then one of the larger guys will just buy you out or force you out. Facebook bought Insta for the sole reason to reduce competition. Meta bought them out at $1B, which was huge for a small business buyout. Post-Meta, Insta is now estimated to be worth $100B Literally a penny on the dollar for the buyout. Meta also bought out WhatsApp at $19B, currently estimated to be $109B worth today. Like things that are regular names at this point were once small businesses that were serious threats to larger companies. Meta's Messenger was under serious threat by WhatsApp prior to the buy out.

And sometimes the point is to just get rid of the business altogether. Microsoft bought out Wunderlist for the sole reason to kill off the app. Google bought out Waze and has constantly been keeping them just functioning, but in 2020 the FTC launched yet another investigation into Google over Waze.

Small businesses won't thrive without restricting some of the anti-competitive behavior of the larger corporations.

mean_bean279 ,

Those companies were all worth millions by that point. I completely agree about splitting monopolies, but y’all are willing to sacrifice the common man (the people you’re closest to in class) simply because maybe, possibly, potentially they could be bought out by a major monopoly rather than the real helpful to the middle/lower class which is helping them get started and building their own wealth.

helopigs ,

more businesses could facilitate more work, right?

GBU_28 ,

Many small businesses fail in the first year due to taking on necessary costs before clients/ customers are well established. Getting through that period would make businesses more sustainable.

Blackout ,
@Blackout@fedia.io avatar

Well it sure beats getting your taxes raised just to give the rich another cut. This can actually help me out as I'm working to start a small shop here in Detroit. $50k is the cost of a good used CNC lathe.

Carmakazi ,

My [likely ignorant] take is that we need better incentives for workers, renters, and first-time homeowners, not MBA shysters “entrepreneurs” creating “new businesses” dropshipping imported garbage and other ventures that add little value to society.

GBU_28 ,

Yikes at the strikeout word

Protoknuckles ,

A lot of people do not know the racist connotation of that word. I used to use it all the time until I found out it is antisemitic!

Mozingo ,
@Mozingo@lemmy.world avatar

It is? Like I’m honestly interested as an etymology nerd, but I can’t seem to find anything that directly ties this to antisemitism other than a vague “idk it might be.”

What I see is some people claiming it comes from either a historical sense of “shy” meaning disreputable, or the German word Scheißer, meaning shitter.

Protoknuckles ,

You may be right! law.com found the same. I had heard the shylock part, and often time Jewish people are demonized as unscrupulous lawyers and bankers, so it made sense. I’m not sure now… I think I’ll avoid it still to keep people comfortable, even if it is a fun word to say…

doingthestuff ,

They way I understood it from the '70s until today was the German shiiters meaning, or bullshitters. Liars, cheats, scammers. Our family has a strong and recent German heritage and connection still, there are some original German speakers in the family still living. So maybe a translation bias.

bassomitron ,

Tf are you on about? You realize that a huge chunk of small business owners are middle class, right? Hell, many of them are barely holding on at all. My wife is a social worker and started her own “business” this year, which is just a small office she rents so she has a safe place to meet her clients. I promise you we are far from being wealthy. Don’t confuse small business as being riddled with millionaires and billionaires, because that’s just complete nonsense.

Mozingo ,
@Mozingo@lemmy.world avatar

I assumed they were pointing out how small business tax breaks can be taken advantage of by those wealthy types pretending to be people like your wife. On the other hand, benefits to workers, renters and first time home-owners can’t be exploited as simply and would benefit your wife just the same. But if I’m wrong then, yea, I agree with you 100%.

forrgott ,

I honestly couldn’t care less about middle class. They’re comfortable. I’m not. Therefore, they don’t need help…

wintermute_oregon ,

It’s lemmy. Most people don’t get a small business is often tradesmen, the local restaurant down the street or that weird quirky store in your neighborhood.

They’re also the ones struggling hard right now. I’m no fan of Harris but based on the limited article, I support the idea.

We need to make it easier for the average person to start a business and have some prosperity.

I seek out small locally owned businesses as often as I can.

Carmakazi ,

Starting your own business should not be the best or only vehicle to prosperity. You should be able to make a comfortable living working a normal job that doesn’t break you.

Failure rate of small business is high, and you can’t blame all of that on lack of startup capital. Bad concept, bad execution, bad location, etc. could all play into it. The taxpayer should not be obliged to keep a “quirky” store running if it doesn’t bring in customers. Throwing good money after bad isn’t going to bring prosperity to anyone in the end.

Not to mention that they compete with each other, not just the megacorps. I’m pretty sure there are half a dozen hair salons on our main street alone, and most of them sit empty at any given time, endlessly changing hands. Incentivizing startups will only make competition more fierce, so a few more winners but much more losers.

We don’t need more restaurants giving the community more below minimum wage jobs that can’t be filled. We need that money helping everyone, with rent or groceries or something, so that they can actually have money to spend at the small businesses that exist.

Veedem ,
@Veedem@lemmy.world avatar

Interesting incentive move. I immediately wonder how people are going to exploit it, though I don’t believe the potential for abuse should dissuade an attempt at progress.

expatriado ,

open business, close business, open new business, repeat, but they are all the same

relative_iterator ,
@relative_iterator@sh.itjust.works avatar

A deduction isn’t a handout. You don’t get free money you didn’t already earn.

bassomitron ,

Yeah, if this was a credit that’d be a different story and very ripe for exploitation. However, a deduction is still quite a bit of money to reduce your taxable income by.

expatriado ,

my comment implies there was already a business or a business to be made, and closing and reopen was a metod to game system for 50k deduction, hence less taxes, each time this is done

gdog05 ,

If your business is doing so poorly that deducting a single person’s wage for the first year is worth that effort then…I guess yeah. Game away.

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