Sen. Elizabeth Warren (D-Mass.) released a plan Friday to close the racial wealth gap by issuing $7 billion in grants to entrepreneurs of color. The grants could be used for startup capital to support an estimated 100,000 new minority-owned businesses, potentially creating 1.1 million jobs. “Every American should have a fair shot at starting a small business,” Warren wrote in a Medium post announcing the plan. “The only things that should determine whether a new business succeeds are the strength of the idea and the hard work of the owners and employees.”
Warren’s plan, called the Small Business Equity Fund, would target the wealth disparity between white entrepreneurs and those of color, who own about a fifth of businesses with paid employees in the United States despite making up almost 40 percent of the population, according to Warren’s announcement. Warren hopes to fund the plan through an “Ultra-Millionaire Tax”—a two-cent tax on every dollar of wealth above $50 million—and to grant the funds to entrepreneurs eligible for the Small Business Administration’s 8(a) program who have less than $100,000 in household wealth.
“Because the government helped create that wealth gap with decades of sanctioned discrimination,” Warren says in the announcement, “the government has an obligation to address it head on—with bold policies that go right at the heart of the problem.”
Warren’s proposal is one of several plans, including her student loan debt cancellation plan and her housing plan, designed to eliminate barriers to economic prosperity for black, Latinx, and Native American communities. Her announcement comes two days before the Black Economic Alliance’s 2020 Presidential Candidates Forum, where Democratic presidential hopefuls will discuss their plans to advance economic opportunities for people of color.
Read Warren’s detailed plan here.