Obama’s tax plan doesn’t hurt small business

Just in case anyone asks...


Obama’s tax plan doesn’t hurt small business
Posted on October 3, 2008 by Brian Angliss


UPDATE: Marc in the comments made a point about sole proprietorships with employees that I’d like to address as well.

Barack Obama wants to reduce taxes for roughly 95% of the United States while raising taxes on the other 5% - those making more than $200,000 per year. John McCain wants to lower taxes on everyone, and attacks Obama’s tax increase on the upper 5% as destroying small businesses and jobs. I decided to do some research on this issues to see if, in fact, raising taxes on those individuals making more than $200,000 would reduce employment or not, and I found out some interesting things. The conclusion, however, is this: Obama’s tax increase on the wealthy will not directly harm small businesses. At. All.

First, some definitions so we all know what I’m talking about. So far as I can tell, the only small businesses that pay taxes at the personal income rate are “sole proprietorships”, the simplest type of business in the U.S. According to NOLO.com, a sole proprietorship may have employees, but the census indicates that the bulk of sole propreitorships do not - they’re considered nonemployers, and they are the largest portion of all U.S. businesses.

In 2005 (the last year for which there is both data on nonemployers and employers at the U.S. Census Bureau), there were 20,392,068 nonemployers with a total income of $951 billion (Source: Nonemployer Statistics, 2005, Total for all sectors, United States). Small business employers1 numbered 5,878,784 (Source: Statistics of U.S. Businesses, All Industries, 2005). The total number of all employer and nonemployer businesses in 2005 was 26,375,614, of which 26,270,852 (or 99.6%) would qualify as small businesses as I’ve defined it above. This would be why people respond when you threaten to increase taxes on small businesses - there’s a LOT of small businesses.

But look closer at those numbers. The average income per nonemployer small business is the total income divided by the number of employers, which in this case is only $46,635. What that means is that the vast majority of nonemployer small businesses (which we can probably fairly say are mostly sole proprietorships) would be unaffected by the Obama tax cut. In fact, since they make so little, they’d get a tax cut, not a tax increase.

Yes, you read that right: the average small business would get a tax cut under Obama’s tax plan, not a tax increase as McCain has suggested.

more...

http://www.scholarsandrogues.com/2008/10/03/obama-tax-plan/

I don't care about the tax cut but I am anxious for the refundable health care credit.

They agreed that Obama's taxing the higher incomes more was good, but would never happen since the rich can always figure out loopholes and it would then simply get passed on to the lower income people. I had to double check. So by taxing the rich, it actually means the poor will pay more? Yes. Hence, they won't vote for Obama since their taxes will go up.

eyeroll, wtf, lots of other emoticons

was a shame that small business owners voted republicans because evidently Democrats were helping them.

Things have Changed.

Rec'd~