Small Business Tax Breaks and Fed Rate Cuts on the Horizon

Harris Pushes Major Tax Relief for New Small Businesses

Vice President Kamala Harris is set to announce a significant expansion of tax relief for small businesses. The plan includes a tenfold increase in the tax credit for new businesses, raising it from $5,000 to $50,000. This means eligible businesses can reduce their tax bill by up to $50,000, easing startup costs.

With a target of 25 million new small business applications during her first term, Harris aims to surpass President Biden’s record of 19 million.

This expansion of tax relief for small businesses may present new opportunities for investors, opening doors to invest in more emerging businesses.

Cooling Job Market Increases Odds of Interest Rate Cuts

The U.S. labor market is cooling. The latest data from the Labor Department shows a drop in job openings, fueling expectations that the Federal Reserve may cut interest rates soon.

In July, job openings fell by 237,000, bringing the number of openings as a share of total employment down to 4.6%. That’s the lowest rate since December 2020.

At the same time, layoffs increased by 202,000, indicating a shift in employer sentiment.

The ratio of open jobs to unemployed workers has fallen to 1.1, indicating that job opportunities are becoming more scarce.

The Fed is keeping an eye on these signs, and a large interest rate cut may be on the horizon to mitigate further slowdown.

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