Millionaire Tax Hurts Small Businesses - DEBUNKED!

Small businesses in the U.S. create most of our jobs. Are we in agreement so far? This is the one thing that the Democrats AND the Republicans can rarely agree on these days.

According to the Census Bureau the vast majority of small businesses have 9 employees or less. In 2008 there were 27,757,676 total firms. 

• Of these only 21.8% have any employees at all.
• Of the firms that have employees 78.8% have 9 employees or less.
• Of the 6,049,655 employer firms in 2007 61.2% had sales receipts of $999,999 or less, so the owner can't pay themselves a million-dollar salary.

Fox News and the Republicans are always saying that Obama wants to tax small businesses, hurting "job creators", when it's only a proposed tax on those earning over $1 million a year. But those are usually CEOs of BIG businesses, not small businesses. And they usually earn much more than $1 million (Unless you were like Karl Rove, incorporated yourself, and ran a supper PAC, and paid yourself a million dollars or more.)

Millionaires (large corporate CEOS, etc.) get paid from profits in the corporate treasury. If there's some cash left over after operating costs, the board of directors can vote themselves a bonus. It has nothing to do with creating jobs. And like Warren Buffett says, these large corporate CEOs are paying a lower tax rate than their secretaries.

Corporate taxes on the corporate treasury after profits is an entirely different matter. Example: Exxon-Mobil had the greatest profits ever in the history of mankind, paid no corporate taxes and even received a taxpayer subsidy....and they employee 83,600 people worldwide out of a U.S. labor force of 150 million. Exxon's CEO Rex W. Tillerson earned $29 million in total compensation in 2010.

Obama only wants tax Mister Tillerson the same effective tax rate that's currently being taxed on the owner and sole proprietor of Sally's Lemonade Stand and Mister Tillerson's secretary. Obama wants to tax him, not you.

John McCain once claimed that 23 million small-business owners would pay higher tax rates under Obama. He was wrong. The vast majority would see no change, and many would even get a cut.

The U.S. Small Business Administration Office of Advocacy estimates the total number of "small" firms with fewer than 500 workers reached 26.8 million in 2006. That’s the most recent estimate. But even that number is inflated.

It turns out, SBA’s estimate includes more than 20 million "non-employer" firms, an unknown number of them sideline or hobby businesses run by persons who actually make their living some other way. Census and SBA count as a "small business" anyone who reported as little as $1,000 of business receipts.

By that very broad definition, Barack Obama would also be a small-business owner, by virtue of his book income. As would President Bush, Vice President Cheney, Karl Rove, and maybe even myself (if you left me a modest donation with Paypal) 

Of the 26.8 million that SBA counts as "small businesses," fewer than 6 million are actually "employer firms" with any payroll (I don't hire people either).

From this, we must conclude that to arrive at McCain's previous 23 million figure, he and the Republicans are counting mostly "business owners" with no workers, including those who simply report small amounts of income from sideline or freelance work. The Republicans are arguing that Obama’s tax increase would "destroy jobs," but he’s counting mostly firms that don’t produce any.

That in itself is seriously misleading. If the Republicans want to focus on the effects of Obama’s plan on employment, they would do better to confine their count to employers – the just under 6 million firms that actually have workers.

And even that figure wouldn’t be applicable because Obama’s tax increase wouldn’t fall on all employers, only on those with PERSONAL INCOMES over $1 million. Taxes will go up only if small-business owners have capital gains or dividends, but Obama’s proposal would not increase rates on capital gains or dividends for couples making under $250,000, or singles making under about $200,000, regardless of whether they are classified as small-business owners or not.

Recently on Fox News Eric Bolling had said that 96% of the U.S. Chamber of Commerce's members are small businesses. But what he also deliberately failed to mention was that only 11% of all small American businesses actually belongs to the U.S. Chamber of Commerce.

The actual number of business owners who would be affected by Obama's "millionaire tax" turns out to be well under a million, and the number of employers would be even less.

However, not even all of those can properly be called "small-business owners" (or "JOB CREATORS"). Some are farmers. Many are lawyers, accountants or other professionals who get some of their income in the form of partnership distributions. Others may be passive investors in real-estate partnerships or similar investment arrangements and not really persons who own and manage a business....OR HIRE PEOPLE.

For all these reasons it was judged that the actual number of small-business employers who would face higher tax rates under Obama is probably far below what the Republicans claim. and certainly a far cry from the Republican's ridiculously inflated 23 million figure.

So what have we learned? Let's recap: Most jobs are created by small business owners and most small business owners don't have personal incomes over $1 million a year in personal earnings (maybe GROSS revenues, but not PERSONAL SALARIES). "Job creators" wouldn't be hurt, just our economy and the government's ability to conduct it's business would be hurt -- by NOT taxing millionaires (like Exxon's CEO Rex W. Tillerson).

But as always, the Republicans use false statistics and outright lies to get their own way. That's why I hate Republicans and the Fox News channel...because so many are millionaires and are just too greedy to pay their fair share.

* Sourced from Fact Check and the Census Bureau