Politifact.org on the "small business owners making more than $200,000/yr tax hike"

[Motown_Johnny]

It is more complicated than the one paragraph I am snipping implies. I suggest reading the entire page.

http://www.politifact.com/truth-o-meter/statements/2010/jul/27/stephen-hayes/so-called-wealthy-are-actually-small-business-owne/

^snip^

There's one final point we want to clarify here for our readers, because we've been asked about this before: If you are a small business owner yourself, you would have to be a whiz running a very profitable small business to get hit with a tax increase under the plan Obama supports. You would have to report total income of more than $200,000 (or $250,000 for couples) after all your business expenses were deducted. You may remember this being a key point during the Joe the Plumber debate during the 2008 campaign when Samuel Joseph Wurzelbacher said to then candidate Obama, "I'm getting ready to buy a company that makes 250 to 280 thousand dollars a year. Your new tax plan's going to tax me more, isn't it?" Back then, the Tax Policy Center analyzed all taxpayers, of any income level, who report these types of business income. They found only about 2 percent of them would see tax increases if the government increased the rates on the top earners. So the vast majority of possible small business owners would not see a tax increase if the Bush tax cuts expire for those in the top incomes.


(emphasis is mine)

[handmade34]

1. this point is too often

lost on non-thinking people ...

[w4rma]

2. Companies on the edge of that income after expenses number can afford to hire another

employee or two to drop the income after expenses level to below the threshold.

[Warren Stupidity]

3. even if one accepts the premise

I am still missing how a small business owner is special such that his receiving 250,000 in compensation from his business should not be subject to a tax increase while some salaried employee making 250,000 should.

Further, how is it that, again if one accepts the claims made, small businesses with owner incomes at this level managed to thrive in the 90's before the bushcuts?

[Motown_Johnny]

5. "their" argument is....

that since small businesses account for about 80% of jobs then the owners should be helped to make even more money so they will hire more employees and create more jobs.


Unfortunately they don't place demand into the equation. No small business owner is going to hire more employees simply because they have the money to do so. They hire more employees when demand for their product or service requires it.

[quiet.american]

4. Thanks for posting. And what a blast from the past - Joe the Plumber.

You may remember this being a key point during the Joe the Plumber debate during the 2008 campaign when Samuel Joseph Wurzelbacher said to then candidate Obama, "I'm getting ready to buy a company that makes 250 to 280 thousand dollars a year....

Yeah, right, Joe.

[Overseas]

6. 2%. Only 2%. K&R. //nt