The equation you're asking to prove is
$$x^{n+1}-y^{n+1}=(x-y)\sum_{k=0}^n x^k y^{n-k} \tag{1}\label{eq1}$$
for all $n \in \mathbb{N_{0}}$. As mentioned in multiple question comments and in Trevor Gunn's answer, the base case of $n = 0$ is true (as you use induction on the limit variable, not the summation one of $k$) since $x - y = (x - y)x^0 y^0$ and $x^0 = y^0 = 1$.
Continuing the induction proof, assume \eqref{eq1} is true for $n = m$ for some $m \ge 0$, i.e.,
$$x^{m+1}-y^{m+1}=(x-y)\sum_{k=0}^m x^k y^{m-k} \tag{2}\label{eq2}$$
The RHS of \eqref{eq1} for $n = m + 1$ is
$$\begin{equation}\begin{aligned}
(x-y)\sum_{k=0}^{m+1} x^k y^{m+1-k} & = (x-y)\left(\sum_{k=0}^{m} x^k y^{m+1-k} + x^{m+1}y^{0}\right) \\
& = (x-y)\left(y\sum_{k=0}^{m} x^k y^{m-k} + x^{m+1}\right) \\
& = y\left((x-y)\sum_{k=0}^{m} x^k y^{m-k}\right) + (x-y)x^{m+1} \\
& = y\left(x^{m+1}-y^{m+1}\right) + x^{m+2} - yx^{m+1} \\
& = yx^{m+1} - y^{m+2} + x^{m+2} - yx^{m+1} \\
& = x^{m+2} - y^{m+2}
\end{aligned}\end{equation}\tag{3}\label{eq3}$$
This is the LHS of \eqref{eq1} for $n = m + 1$. This shows \eqref{eq1} is true for $n = m + 1$ if it's true for $n = m$, and since it's true for $n = 0$, induction shows \eqref{eq1} is true for all $n \in \mathbb{N_{0}}$.