You may wonder what an incoming Biden-Harris administration means for you as an entrepreneur. Whether you're considering making the leap, just getting your business off the ground, or have been running your own company for quite some time, understanding the basics of President-elect Biden's policy proposals will help you plan effectively.
Looking to start a business or beginning to transition your side hustle into a full-fledged business? The Biden administration outlined several programs that may help you, including:
● Directing $400 billion worth of federal funding towards American businesses, especially women-owned businesses
● Expand existing Small Business Administration programs designed to support women
Additional programs include establishing a national network of business incubators, as well as setting up business development programs at every public community college, two-year HBCUs, and other minority-serving higher educational institutions. And for military spouses, the Biden administration plans to nurture entrepreneurship through grants and other forms of support.
Changes to The Tax Code
President Biden's tax proposals may affect you depending on how much you earn. The Biden administration will advocate for a corporate tax rate of 28% (up from today's rate of 21%); an increase in taxes on annual income over $400,000 to 39.6% from the current rate of 37%, and an increase in the long-term capital gains tax to 39.6% for those earning more than $1 million each year.
The Biden administration plans to increase the estate tax rate from 40% to 45% and reduce the exemption amounts for the estate tax to $3.5 million and the gift tax to $1 million. President Biden will also push for the elimination of an estate tax loophole known as the stepped-up basis. If your business or other investments appreciate over time and you pass those assets on to your heirs, they can sell those assets after your death and avoid long-term capital gains tax. The Biden administration plans to eliminate this by taxing those unrealized gains upon your death.