Research Question: Obama & Small Businesses

I am NOT looking for opinions I just want to do some research so I feel better educated on the facts.



I would like to do some research on my own about Obama's Tax Plan and how it relates to Small Businesses.

Ideally from non-biased sources ...

Can anyone point me towards some good sources, ones that hopefully explain things in plain english as I don't have a degree in economics.

Thanks!

Re: Research Question: Obama & Small Businesses

I'm looking, Jess, but not finding much.

Here's a link to his campaign's site about his tax cut plan, for what it's worth:

link

Re: Research Question: Obama & Small Businesses

I've been looking too. It's hard because I can not seem to find unbiased views despite a google search.

What I can tell you is that from what I read, some of the info can be misleading or confusing. For example, it seems that many people view most small businesses as those businesses having no employees. Like my FIL owns a small business, but he has no one working for him. He never really did well, so I can't tell you what he makes. My family has had a small business since 1973. My dad had 2 people (one being my DH) working for him, now only 1. He's not rich. He would deinitely be affected by the tax increase. I think what needs to be also in mind when discussing this is that a lot has to do with the type of business you have. Someone who has one kind of business that does not have a lot of overhead and does not provide a costly service, may not make as much as someone who has to order materials that cost $3k+...and lay it out. I really do think most successful (I mean they have a descent amount of business and are operating) are making $250k and more. Unfortunately when businesses like this get taxed more, on top of a bad economy, they tend to lay off people because of the added expense w/ the lower income. I can say this with confidence because I have lived through this w/ their business w/ the last recession. I would say a mom and pop resturant is a small business that would make $250k. An HVAC company would make more than $250k. So on and so forth. I would say that most comapnies would have to if they are not operating from their home between the cost of operation, paying employees, licenses, materials, insurance (i.e. unemployment, workers comp, etc), utilities, rent, taxes, gasoline, etc. There are a lot of liabilities w/ owning a small business.

Re: Research Question: Obama & Small Businesses

See ... that's my problem ... everything source I find via Google searching seems biased!

I guess the most confusing thing to me is trying to understand if the tax increases are for "businesses earning" $250k+, or for "business owners taking home" $250k+

Also, if its for "businesses earning" $250k+ ... is that amount TOTAL SALES, or is it PROFIT after all the expenses are paid (rent, electric, gas, telephone, materials, etc.)?

I just wish they would be more clear about this stuff ...

Re: Research Question: Obama & Small Businesses

This is actually a blog but it is written by a Tax Law Professor and it is actually pretty well known. I have never read it so I do not know if it leans one way or the other but it may be a good starting point.

http://taxprof.typepad.com/

Re: Research Question: Obama & Small Businesses

Posted by PreshusSmurf

See ... that's my problem ... everything source I find via Google searching seems biased!

I guess the most confusing thing to me is trying to understand if the tax increases are for "businesses earning" $250k+, or for "business owners taking home" $250k+

Also, if its for "businesses earning" $250k+ ... is that amount TOTAL SALES, or is it PROFIT after all the expenses are paid (rent, electric, gas, telephone, materials, etc.)?

I just wish they would be more clear about this stuff ...

Message edited 10/24/2008 11:41:59 PM.

Re: Research Question: Obama & Small Businesses

Ahhh info from the good 'ole IRS!!

IRS - what taxes small businesses must pay

I was correct though. Taxed on income.

The individual owners have their own tax returns to fill out but the business is a seperate tax return. So if the business owner makes $250k in salary, yes his individual taxes may increase. The business is a seperate return though. It's like the business is a seperate person all it's own. Now, someone who is labled as "self-employed" is different. The IRS actually defines how a small business is different than self-employment.

Message edited 10/24/2008 11:56:13 PM.

Re: Research Question: Obama & Small Businesses

Yes, you are correct that sales tax is something completely different.

And the employees/owners of a business file 1 set of returns for their own income, and the business itself has its own taxes to file.

It seems you are right, that it would be based on business income and not business profit.

But I guess why I'm trying to figure out is at what point with Obama's plan will the taxes on a Small Business increase? And also, how much will they increase?

Maybe that information just isn't out there?

I tried looking at that blog but it crashed my browser, so I will try tomorrow on another computer.

I really appreciate all who have tried to help so far ... I know this info isn't easy to find ... or to explain!

Re: Research Question: Obama & Small Businesses

anything u'll find on the internet has some sort of political motivation and bias.
searching on the internet won't help you.
but if you keep searching--good luck!

Re: Research Question: Obama & Small Businesses

Re: Research Question: Obama & Small Businesses

BUMP for daytime crowd

Re: Research Question: Obama & Small Businesses

Ok, wait, im lost. My hubby is a small business owner. The businesses gross income is over $250k. After expenses the net is under $250k. I would LOVE an answer to this question!!

Re: Research Question: Obama & Small Businesses

Re: Research Question: Obama & Small Businesses

Posted by PreshusSmurf

Posted by KPtoys

Ok, wait, im lost. My hubby is a small business owner. The businesses gross income is over $250k. After expenses the net is under $250k. I would LOVE an answer to this question!!

I'm glad I'm not alone in being completely !!!

I think just about any business with significant operating expenses has to gross $250k+ ... There is a HUGE difference between gross and net, especially for a small business!!!

Re: Research Question: Obama & Small Businesses

This is all I could find to explain his position but it's from Obama's own site. I know you were looking for independent sources but I thought this statement was helpful, nevertheless.

From the horse's mouth:

FAQs
As a small business owner who claims small business income on your individual tax return (whether through a sole proprietorship, partnership, or S-corp) you pay individual income taxes only on your net income — or profit — and not on your firm’s gross revenue. Accordingly, when Obama says that he would roll back the Bush tax cuts for all couples earning more than $250,000 a year, these income figures include only net income that a small business owner takes home. Because net income is usually far lower than gross revenue, even if your revenue is above $250,000 you are still likely to get a tax cut under Obama’s tax plan.

Re: Research Question: Obama & Small Businesses

Posted by PreshusSmurf

See ... that's my problem ... everything source I find via Google searching seems biased!

I guess the most confusing thing to me is trying to understand if the tax increases are for "businesses earning" $250k+, or for "business owners taking home" $250k+

Also, if its for "businesses earning" $250k+ ... is that amount TOTAL SALES, or is it PROFIT after all the expenses are paid (rent, electric, gas, telephone, materials, etc.)?

I just wish they would be more clear about this stuff ...

Re: Research Question: Obama & Small Businesses

I know it can be confusing...this is going to really HURT my DH's business

Re: Research Question: Obama & Small Businesses

Posted by Diane

I know it can be confusing...this is going to really HURT my DH's business

Re: Research Question: Obama & Small Businesses

I think all the tax raises will hurt everyone in general even if indirectly. Those making $250K and more will likely cut back other places like shopping, travel, dining, entertainment, etc. And business who will be getting taxed will likely make lay offs. Either way if people are spending less- that will probably result in more layoffs in retail and entertainment/vacation industries, in addition to those layoffs in smaller businesses who will be getting taxed. I don't think this is going to be too good.