Stop talking about how much Small Businesses MAKE

Major Pet Peeve. Obama does it. Biden does it. Everybody does it.

The word "make" is very inexact, as most people use it and hear it.

You do not say that a tax only affects small businesses that "make" over $250,000/year. That is terrible political language.

It only affects small business owners who have more than $250,00 in taxable profit. If a small business is incorporated it only affects a small business owner who pays himself a salary of over $250,00/year in adjusted gross taxable income. (Meaning something higher than $250K in practice, with personal deductions.)

Who the hell has over $250,000 in annual salary or profit? Very well to do people, that's who.

Say "small business" and people picture a little store. Say "make $250,000 a year" and people ask, does that little store take in over $250K/year? Maybe so... that is only $685 a day.

But the business owner doesn't pay income tax on how much the store takes in. She pays taxes on the profit.

Subtract everything the store spent on everything... employees, the goods sold, rent, utilities, taxes, insurance, the fixtures in the store, the cash registers, contributions to social security... everything. The is no federal tax on any of that. None.

Now Here is where it Gets Really Interesting...

Republicans say that taxing personal income over $250,000 is a tax on small business. That is a lie, of course, be we suck at explaining why.

More pointedly, they imply that this tax on small business (sic) will cost jobs. Most jobs do come from small business, so that has a psychological veneer of sensibility if we insist on explaining this poorly.

Say Sam's Auto Repair makes enough profit that Sam pays himself $300K/year in salary. And say the tax rate on the top $50K of that salary increases a few percent. What effect with that have on hiring at Sam's Auto Repair?

None. It cannot have any effect. Can. Not. Nobody hires business employees from their personal income. All employee costs are paid by Sam's Auto Repair and are fully deductible. There is no tax whatsoever on hiring costs. It makes no difference whether Sam takes home $45K or $300K. All employee costs are tax-free.

There is no scenario in the real business world where an increase in Sam's personal income tax rate could rationally influence Sam to have fewer employees.