When asked during the recent debate and subsequent interview how she will bring down prices and make life more affordable for people, Kamala Harris offered us her Opportunity Economy Plan.

The first tentacle of the plan calls for an increase in the business start-up cost deduction from $5,000 to $50,000. Under the plan, new small businesses will be able to deduct up to $50,000 of start-up costs in their first year of active operation. According to Kamala Harris, “nobody can start a business for $5,000”. Of course that depends on the type of business, its location, and the number of regulations involved.

Let us be clear. This is not a government giveaway. The federal government is not going to give anybody any money to start a small business. The proposal simply allows a business to deduct expenses, incurred before it opens its doors, of up to $50,000 in its first year of operation. Since you have to come up with the money on your own, the opportunity is really no different than it is today.

How does this bring down prices and make life more affordable for people? It does not.

How are people who cannot afford groceries, housing, real estate taxes, insurance and childcare supposed to come up with $50,000 to start a business?

Will the ability to write off an extra $45,000 of business start-up costs in the first year, instead of equally over a 15-year period, somehow magically bring down prices and make life more affordable for people? No.

In addition, the plan includes increasing the Child Tax Credit from $2,000 to $6,000 for newborn children. However, this is not a tax cut, it’s a targeted tax credit that will provide a little relief for those expecting newborns, nothing for the majority of Americans, and will in no way lower prices. In fact, due to additional government borrowing, it may result in even more inflation.

Finally, the plan calls for $25,000 in down payment assistance for first-time homebuyers. Will this put a dent in inflated home prices, interest rates, real estate taxes, and homeowners’ insurance costs? No. In fact, it will either have the opposite effect or no effect at all. If the down payment is the main concern, one could always apply for an FHA Loan and put down as little as 3.5%.

In conclusion, Kamala’s Opportunity Economy Plan offers nothing to combat inflation or to improve the US economy. It is truly time to turn the page.

References:

IRS: Here’s how businesses can deduct startup costs from their federal taxes

Action News anchor Brian Taff’s full interview with VP Kamala Harris