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.

You do realize that many small businesses are taxed at the individual rate of their owners, right?

From the US Treasury: Link

"The business income from sole proprietorships, farm proprietorships, partnerships, S corporations, etc., is all taxed at the owners' individual income tax rates. This year 34 million business owners are expected to receive this type of income and pay tax on this income through the individual income tax. These businesses are typically small and often entrepreneurial in nature, and a source of innovation and risk-taking in the economy. Moreover, these business owners are frequently subject to the highest individual income tax rates."

On the reduction of the top two tax brackets:

"Reductions in the top 2 tax brackets
• About 70 percent (about 1 million) of the 1.4 million tax returns that benefit from lowering the top
two tax brackets from 39.6 percent to 35 percent, and from 36 percent to 33 percent, are flow-through
business owners.
o Nearly 540,000 of these taxpayers receive more than 30 percent of their income from flow-though
businesses.
• About 81 percent (about $27.3 billion) of the total $33.8 billion in tax relief this year from lowering
the top two tax rates will be received by flow-through business owners.
o Individuals with more than 30 percent of their income from flow-through businesses receive 44
percent (or about $15.0 billion) of the total tax relief from lowering the top two tax rates."

Because so many taxpayers in the top income brackets are small business owners paying their personal tax rate on their business, Obama's plan to raise their taxes will actually take money directly out of small businesses.

From the Cato institute:

“About one-third of the workers affected by raising the Social Security earnings cap would be small business owners."

"However, removing the cap would create the largest tax increase in U.S. history: $ 1.3 trillion over the first 10 years. Even increasing the cap to cover the first $150,000 of wages would amount to $384 billion in new taxes. It would give the United States one of the highest marginal tax rates in the industrialized world, with the potential for severely disrupting economic growth."

(Michael Tanner, "Keep The Cap," The Cato Institute, Link, 6/8/05)

The increased tax burden on a small business WILL cost jobs. Small businesses employ a huge number of american workers, less money kept in the business = less money to pay employees- It's just a fact. It's not the rich people that end up paying for this tax plan, it's those they employ that are hurt.

We only have to look as far as Fannie Mae to see how well public-private entities work... Great, another way for governement to arbitrarily waste my money.

Senseinobaka, this is where not being a complete idiot helps.

Obama's plan helps corporations and large businesses create jobs for obvious reaons. Concerning small busineses where the owner pays on his individual income, the increase in taxes will be very small, but that will be outweighed by the fact that their customers (middle class Americans) will have more money to spend and thus give them more business.

You know better than that.

Dude, you have serious issues respecting people that disagree with you. The way you talk down to people with different opinions than yours really shows a lot about you.

"that way you can atleast sound almost educated when you comment" was directed at me.  I dont care who you are or what opinion you have, if you attack me negatively and your an idiot I'll call you out on it.

He attacked your knowledge of a particular issue, then you leveled a personal attack (idiot is a far worse insult than saying somebody isn't educated on an issue). I always get the feeling from you that you're looking down your nose at anybody that doesn't see the world the same way as you do. It's a fundamental lack of respect that you show, not just an issue of your previously mentioned comment.

EDIT: By essentially defining 'idiot' as somebody who disagrees with you, you have proved my point.

"This is where knowledge and education really helps" implies that I lack knowledge and education in all matters, but for this point it would really help.  Saying that I am "unable to sound almost educated" is also an attack on me, not the issues.