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Conservative economists pour cold water on Harris' new small-business tax proposal

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Conservative economists pour cold water on Harris' new small-business tax proposal

Conservative economists are pouring cold water on Vice President Kamala Harris’ new proposal aimed at reducing startup costs for new small businesses as part of her “Opportunity Economy” economic platform.

Harris unveiled new small-business tax proposals last week aimed at reducing the cost burden related to starting a new business. Among the proposals was a substantial increase in the standard tax deduction for small-business startup costs, from $5,000 to $50,000. “It’s essentially a tax cut for starting a small business,” the vice president said during a stump speech announcing the new proposal. “We’re going to help more small businesses and innovators get off the ground.”

Meanwhile, Harris has simultaneously expressed support for raising marginal tax rates for both corporations and individuals, which conservative economists argued would work to diminish the benefit received by the tenfold increase in the startup deduction. 

“She wants to increase taxes on all kinds of income, on all classifications of income, so no matter how the small business is ultimately structured, they will still be paying more,” conservative economist E.J. Antoni told Fox News Digital. “Now, is that going to be diminished by this increase in the tax deduction? Absolutely. But, then, why are you doing both? That doesn’t make any sense.”

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Under the Trump administration, standard deductions were increased while marginal tax rates were lowered, Antoni pointed out. Additionally, under former President Trump’s tax cut measures, small business owners were allowed to claim a deduction for their “qualified business income.” It will ultimately be up to Congress to decide whether to keep any of Trump’s expiring tax cuts.

Trump spoke at the Economic Club of New York on Thursday, during which he laid out plans like lowering the corporate tax rate from its current 21% to 15%. Trump’s first-term tax cuts reduced it previously from 35%.

“Harris wants to do the opposite [of Trump],” Antoni said. “She wants to increase the deduction, but then increase the marginal tax rates.”

The economy consistently ranks as the most important issue for voters heading into a presidential election.

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Robert Wolfe, a Harris supporter and former chairman of UBS Americas, a global wealth management firm, pointed out that the tax rate increase for individuals will only impact those making more than $400,000.

“We want small businesses being built,” Wolfe said. “And we know that the ramp-up phase takes time, and so the idea that we wouldn’t applaud small businesses and entrepreneurs getting tax credits doesn’t make sense to me.”

Richard Stern, director of the Grover M. Hermann Center for the Federal Budget at The Heritage Foundation, said that under current tax laws, new business owners can already deduct most early-stage expenses, like payroll and equipment costs. Startup expenses, meanwhile, are defined under the tax code as those costs incurred prior to a business being registered with the federal government, which, according to Stern, are typically pretty minimal. 

“Harris’ new tax deduction for small businesses isn’t a subsidy for starting a business per se,” he said. “It’s only useful if you actually spend $50K on pre-business expenses. So, this is disproportionately a subsidy for larger starting businesses.” 

Stern also agreed with Antoni’s take that Harris is essentially giving to small businesses with one hand, while taking from them with the other. 

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Antoni, meanwhile, suggested that whoever is formulating economic policy for the Harris campaign is “building the train as it goes down the tracks.”

“It really seems like there were no policy proposals thought out ahead of time, and they are just throwing these things together,” he said.

CRITICS BLAST HARRIS’ GRASP OF INFLATION, ATTACK ON BUSINESS AHEAD OF POLICY SPEECH: ‘LUNATIC BEHAVIOR’

Kamala Harris 'Bidenomics graphic

Vice President Kamala Harris helped create President Biden’s economic strategy known as “Bidenomics.” (Getty Images)

While right-wing economic experts argue Harris’ latest tax proposal would be diminished by her plans to raise taxes in other areas and do little to help inexperienced business owners start their first company, Roger Hochschild, a Harris supporter and former CEO at Discover Financial Services, says the move will be “critical to driving further economic growth.”

“I think she is very clear in her support of small businesses and acknowledging that they are the backbone of the economy,” Hochschild said. 

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Rhett Buttle, a former 2020 Biden campaign adviser, echoed that sentiment. He said the increased tax deduction proves Harris’ “deep commitment” to entrepreneurs, according to NBC News. 

“There are broad strokes here to people from all walks of life,” he said. “Small business and entrepreneurship tends to be a great unifier in a world where people have starkly different political divisions,” Buttle said.

In addition to Harris’ new tax proposals for small businesses, she also laid out her plan this week for taxing capital gains. She wants to increase it to 33%, whereas Biden reportedly wants the current rate, which is at 23.8%, to be nearly doubled, according to The Wall Street Journal.

LIBERAL WASHINGTON POST EDITORIAL BOARD HAS SCATHING TAKE ON HARRIS’ ECONOMIC PLAN: ‘POPULIST GIMMICKS’

restaurant worker holds up a receipt with a note that reads "Vote Trump No Tax on Tip," signed by former President Trump

A restaurant worker holds up a receipt with a note that reads “Vote Trump No Tax on Tip,” signed by former President Trump at a Philadelphia sandwich shop.

Fox News Digital reached out to the Harris campaign for comment on the criticisms about her small-business tax proposal, but was only directed to a social media post of a small business owner speaking at a Harris campaign rally.

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“Do you think that your small business is better off now, than it was under the Trump administration?” NBC’s Gabe Gutierrez asked the entrepreneur.

“Oh, without a doubt,” the business owner, Brad Smith, responded. “And I think the reason is everything to do with optimism — if you’re a doom-and-gloom candidate, or president, you are not going to start a business.”

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Politics

Trump Claims Harris’s Rallies Are Smaller. We Counted.

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Trump Claims Harris’s Rallies Are Smaller. We Counted.

Kalina Borkiewicz, Malika Khurana, Karthik Patanjali and Bedel Saget

The sizable support Vice President Kamala Harris has generated at her rallies has rattled former President Donald J. Trump, who has emphasized, and frequently exaggerated, his crowd sizes for years. He has said, often repeating falsehoods, that his crowds are much larger than Ms. Harris’s, and the Harris campaign has returned with their own jabs about the enthusiasm of Trump rallygoers.

We attended six rallies — every campaign event that the candidates held within a three-week period in August — across six states, taking photographs and capturing video and 360-degree footage, to analyze which claims on crowd sizes hold weight. The analysis found that, despite Mr. Trump’s claims, both candidates draw comparably big audiences.

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On a Friday night, Mr. Trump drew 11,500 people to the Desert Diamond Arena in Glendale, Ariz. Here’s what it looked like:

Photographs and composite by Kalina Borkiewicz and Karthik Patanjali

On a Tuesday night during the weeklong Democratic National Convention in late August, Ms. Harris drew 12,800 to a campaign event at the Fiserv Forum in Milwaukee, Wis. Here’s a scene from that rally:

Photographs and composite by Malika Khurana and Bedel Saget

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The four other campaign events that The Times attended were similarly packed, with audience members generally filling up the space designated for the event. The rallies took place at venues with maximum capacities ranging from 6,800 to 19,300 people, though in some cases sections of seating were cordoned off, and additional seating or standing-only areas were added.

Wilkes-Barre, Pa., Aug. 17

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Justin Sullivan/Getty Images (Las Vegas), Christian Monterrosa/Agence France-Presse — Getty Images (Savannah), Michael Ciaglo/Getty Images (Bozeman), Doug Mills/The New York Times (Wilkes-Barre)

For each of the six events, The Times counted the number of people visible in footage taken just after each candidate began their speech, also accounting for people in dimly lit and obscured areas. This number does not represent the people that may have left early, before the footage was captured, or arrived late.

Crowd size estimates at campaign events

Harris

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Sat., Aug. 10 Las Vegas 6,200
Tue., Aug. 20 Milwaukee, Wis. 12,800
Thu., Aug. 29 Savannah, Ga. 6,200

Trump

Fri., Aug. 9 Bozeman, Mont. 4,300
Sat., Aug. 17 Wilkes-Barre, Pa. 5,900
Fri., Aug. 23 Glendale, Ariz. 11,500

Experts say that crowd sizes at rallies do not have a direct relationship to winning or losing an election. For one, event organizers may strategically choose venues with a small capacity, like college campus buildings where only a few hundred can attend. The day of the week and time of day can also affect the size of the crowd and when people decide to arrive or leave.

Still, crowd sizes have been a sensitive subject for Mr. Trump throughout his political career, his fixation intensifying as of late as enthusiasm has ballooned for the new Democratic ticket. Mr. Trump falsely claimed that photographs of the crowds at Ms. Harris’s events are doctored using A.I.

In response, the Harris campaign posted a video compilation of moments during Mr. Trump’s rallies in which audience members are seen yawning, and also wrote in a separate post on Truth Social that members of Mr. Trump’s audience left the event in Pennsylvania early, “leaving even more empty seats.”

The Times found that people did leave early from two of three of Mr. Trump’s events, including while he was delivering his speech.

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Photographs taken over the course of Mr. Trump’s rallies show where people left their seats. Below is a series of photographs from his Aug. 17 rally in Wilkes-Barre, Pa., taken at 13 minutes and just over 1 hour into his speech.

Examples of crowd thinning during Trump’s speech in Wilkes-Barre, Pa.

Malika Khurana and Karthik Patanjali

And this shows where seats emptied out an hour into Mr. Trump’s speech at the Aug. 23 rally in Glendale, Ariz.

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Examples of crowd thinning during Trump’s speech in Glendale, Ariz.

Kalina Borkiewicz and Karthik Patanjali

The longer duration of a Trump event compared with a Harris one may have contributed to a greater number of early exits. Trump rallygoers typically arrived earlier in the day, and opening speeches tended to start earlier and last longer. Of the six rallies The Times attended, Mr. Trump spoke for four times as long as Ms. Harris.

How long the rallies lasted

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Note: The start time for each rally is determined by when the doors were scheduled to open.

The New York Times

Despite the limited connection between crowd size and election outcomes, the very public sparring between the two campaigns over the metric indicates that it at the very least carries some political significance.

Large, enthusiastic crowds can also help energize the candidate themselves as they give their speech, said Todd Belt, the director of the Political Management program at George Washington University. It can also contribute to a “bandwagon effect,” showing those who aren’t there in person that the enthusiasm for a candidate is real.

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“Even though I do believe these kinds of events don’t change people’s minds, what it does is it makes people feel like you’re not alone,” said Betsy Reiser, 62, an attendee at a rally for Harris in Savannah, Ga. “It is very important to feel like you belong.”

The Times took 360-degree photographs at two-minute intervals and panoramic photographs at 15-minute intervals at the rallies, from the time doors opened through the end of the events. To establish the estimated crowd size, The Times manually counted individuals in a single photographic panorama shortly before or during the candidate’s speech, when crowd density was expected to be highest. The count was then rounded to the nearest hundred.

Note: Green dots represent the people Times reporters manually counted in the arena.

Graphic by Kalina Borkiewicz, photograph and composite by Malika Khurana and Bedel Saget

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Areas that were obstructed from the view of our cameras were photographed and analyzed separately, then combined with the main count where needed. Photographs were compiled into a single composite image that shows a 360-degree view of the arena. Photograph timestamps, cross-referenced with official campaign information and recorded broadcasts, were used to determine speaking time.

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Alan Dershowitz leaves Democratic Party, cites DNC: 'I was disgusted'

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Alan Dershowitz leaves Democratic Party, cites DNC: 'I was disgusted'

Prominent attorney Alan Dershowitz announced his departure from the Democratic Party, citing several “anti-Jewish” lawmakers that make up the ranks of the party and the recent Democratic National Convention in which Vice President Kamala Harris became the party’s presidential nominee. 

Speaking with radio host Zev Brenner on “Talkline with Zev Brenner,” Dershowitz cited the DNC, which he said gave legitimacy to anti-Israel speakers, and anti-Israel protesters outside the gathering. 

“It was the most anti-Jewish, anti-Israel, anti-Zionist convention I’ve experienced,” he said. “I was disgusted at the Democratic National Convention. Absolutely disgusted.”

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Alan Dershowitz speaks during an interview on May 18, 2010, in Jerusalem, Israel. The prominent attorney has announced his departure from the Democratic Party.  (Lior Mizrahi)

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“I am no longer a Democrat. I am an Independent,” he added, noting that he wouldn’t reveal whom he was voting for president until possibly after Nov. 1. “I want to see how they deal with Iran. I want to encourage the current administration to support Israel.”

The Harvard Law professor emeritus said his departure from the party was a long time coming and that he gradually resigned over time. 

“Alot of things pushed me in that direction,” he said. Dershowitz noted Harris’ failure to preside over a joint session of Congress during an address by Israeli Prime Minister Benjamin Netanyahu played a big role in his decision. 

Some Democrats skipped Netanyahu’s speech as a form of protest. 

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Alexandria Ocasio-Cortez

Representative Alexandria Ocasio-Cortez, a Democrat from New York, speaks during the 2024 Democratic National Convention in Chicago, Illinois. ((Photo by Jacek Boczarski/Anadolu via Getty Images))

Ultimately, it was the convention that was held in Chicago last month that pushed him over the edge, he said. 

He named Reps. Alexandria Ocasio-Cortez, Elizabeth Warren, Bernie Sanders, who he said were anti-Israel, and Rev. Al Sharpton, who has been accused of antisemitism in the past.

In addition, there were anti-Israel protesters outside the gathering who called for the destruction of Israel, he said. 

“That’s not my party,” Dershowitz said. 

The Democratic Party has seen a sharp split within its ranks following the Oct. 7 attack on Israel by Hamas. Some members of the party have refused to condemn the terror group and have blamed Netanyahu for Israel’s military response. 

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Many Democrats have called for a ceasefire and urged Israel to use restraint while neglecting to hold Hamas and Hezbollah, an Iran-backed terror group based in Lebanon, in Israel’s north, to the same standard. 

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Winsome Earle-Sears announces VA gov bid to build on Youngkin record: It's 'all about business’

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Winsome Earle-Sears announces VA gov bid to build on Youngkin record: It's 'all about business’

Virginia Lt. Gov. Winsome Earle-Sears announced her bid to succeed term-limited Gov. Glenn Youngkin in 2025, telling Fox News that she wants to build on her fellow Republican’s record of revitalizing the Old Dominion’s economy.

Earle-Sears, if successful in the primary, will potentially face Rep. Abigail Spanberger, D-Va., if the similarly prominent Virginian wins the Democratic primary.

“We really have to win, because the other side is wanting to do all kinds of machinations and so many ‘gotcha’ stuff that’s not going to help propel Virginia forward,” Earle-Sears said on Friday.

Sears said that Youngkin’s single term has laid a “great foundation” for a like-minded successor.

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Former Republican Delegate Winsome Earle-Sears celebrates winning the race for Lt. Governor of Virginia as she introduces then-Republican candidate for Governor Glenn Youngkin during an election night party in Chantilly, Virginia, on Nov. 3, 2021. Reuters/Jonathan Ernst (REUTERS/ Jonathan Ernst)

“We’ve got to keep building on that. We have had corporate headquarters that have moved here — even from overseas. We have grown businesses here. We have been an incubator for business,” Earle-Sears said on “Fox & Friends.”

“It’s all about business, because that’s where the money comes from, so that we can have the beautiful things we like; the quality of life, the schools, the roads, the bridges, all of that.”

Speaking with Fox News Digital, a Youngkin spokesman similarly praised Earle-Sears and called her a “steadfast partner” over the past four years.

“Governor Youngkin is squarely focused on helping Republicans win in Virginia in 2024, because this election is about strength versus weakness — a strong economy, a secure border and strong America,” Justin Discigil said Friday.

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FORMER VIRGINIA DEMOCRATIC GOVERNOR PRAISES GLENN YOUNGKIN

Glenn Youngkin

Virginia Gov. Glenn Youngkin delivers the VCU commencement address in Richmond, Virginia, May 11, 2024. (Parker Michels-Boyce for The Washington Post via Getty Images) (Parker Michels-Boyce for The Washington Post via Getty Images)

“The 2025 election will be about continuing the extraordinary results from commonsense policies that are making Virginia the best place to live, work and raise a family versus returning to the failed extremism of the left-progressive agenda.”

Earle-Sears, who emigrated from Jamaica as a youth, would be the first Black woman to hold such an office in Richmond.

She served in the U.S. Marine Corps and was previously a state legislator from Virginia Beach. Earle-Sears noted Friday that her initial win there had been a major upset in a majority-Democratic district.

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Virginia Gov. Glenn Youngkin, center, signs executive orders in the Governor's conference room as Lt. Gov. Winsome Earle-Sears, left, Suzanne Youngkin, second from left, Attorney General Jason Miyares, second from right, and Secretary of the Commonwealth, Kay Cole James, right, look on at the Capitol Saturday Jan. 15, 2022, in Richmond, Va. (AP Photo/Steve Helber)

Virginia Gov. Glenn Youngkin, center, signs executive orders in the Governor’s conference room as Lt. Gov. Winsome Earle-Sears, left, Suzanne Youngkin, second from left, Attorney General Jason Miyares, second from right, and Secretary of the Commonwealth, Kay Cole James, right, look on at the Capitol Saturday Jan. 15, 2022, in Richmond, Va. (AP Photo/Steve Helber) (AP Photo/Steve Helber)

“I only had three months to run and no money,” she said.

“When you have the right ideas, and when you know the voters have given you a mandate to run, to move forward, then you’ve just got to press forward,” she said on Fox News Channel.

“You have hostile legislators who want to stop you [in] every way because they’re thinking you’re going to get a win — but the win is for the people.”

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