Wall Street Journal BLASTS McCain

[Aiemond]

senseinobaka said:
Rich people's income = small business revenue.

This is where knowledge and education really helps.

Under tax code, any money a small business genreates (revenue) is considered the owner's income. In other words, if you own a plumbing business that has a revenue of 250k (this would be a very small plumbing business with maybe 4-5 employees) the owner of the business would have an income of 250k. The owner will not be living off 250k however since he has to pay; payroll, payroll taxes, buy supplies, pay taxes on bought supplies, buy insurance, pay a liscense tax, pay a business tax, buy capital (trucks, tools), pay taxes on capital, pay taxes when the capital is sold, and pay income tax. Obama wants to raise the income taxes on that 250k which is taxing the business. It's his stated policy. When he says top 1% of earners, he means small business owners since they are the vast majority of that demograph.

Now reducing capital gains only helps businesses that make money buy selling capital. Such as, property flipping. It also helps other businesses that would find themselves in a situation in which an asset needs to be sold for one reason or another. But know that this is the rarity.

What I would recommend for someone like you Manus is simple. Start a small business and run it for a year or two that way you can atleast sound almost educated when you comment.

 

You are correct. At under 250k revenu he is going to claim it as personal income. I grant you that because it is the truth. you need to look at the tax graph though to see how this is going to affect him. First off, this example is gonna have almost no increase in taxes. He is not in the tax bracket that will have any real increases. He needs to make over 650k. This would be a larger small business. Second, Obama's plan also helps with some of these operating costs.

 

Create a National Network of Public-Private Business Incubators: Barack Obama and Joe Biden will support entrepreneurship and spur job growth by creating a national network of public-private business incubators. Business incubators facilitate the critical work of entrepreneurs in creating start-up companies. Obama and Biden will invest $250 million per year to increase the number and size of incubators in disadvantaged communities throughout the country. (This from his plan site)

 

Well, what is an incubator? Well it basically helps with finding good deals on office rentals, group rates on insurance, help from other small business owners, etc. Also, it significantly helps small business not go under.

http://www.smallbusinessnotes.com/starting/busincubation.html

Read this site to have a much better description of them.

"A growing trend in incubators is for the incubator to receive a piece of the action in exchange for office space, cash and lots of business support. They are essentially becoming venture capitalists with the benefit of being on site to help get the business off the ground. The usual amount such incubators ask is about a 20 percent equity stake. Many of the incubators that operate this way style themselves as "startup junkies." They know a lot about what gets a company off the ground right and are enormously helpful in getting a business off on the right foot. For an investment of anywhere between $100,000 to $300,000 plus office space and services, they receive the vicarious thrill of being part of a startup and substantial returns if the business succeeds. For each spot available there are at least 20 applicants so this new type of venture definitely is appealing to all. So far results have been impressive if you are one of the lucky ones to win a place in these incubators."

 

So, some of these incubators are getiing a bit of stake, but have experienced, very good support to significantly help a startup bussiness.

 

So, most of the small businesses that are on the verge of making it or not will not be in a tax bracket that has increased taxes, and the ones that are making over 650k will prolly not be claiming it as personal.