Who is small business?

[Anonymous]

Interesting story on how over 97% of small businesses will remain at the same tax rate if President Obama renews the tax cuts for earners of $250,000 or less.

http://tpmdc.talkingpointsmemo.com/2010/09/gop-bechtel-pricewaterhousecoopers-and-other-small-businesses-will-see-tax-hike-charts.php?ref=fpblg

[Anonymous]

I don't buy this but I am small business and keep in mind that people will not expand and have already cut jobs to stay under.

[Anonymous]

17:48, what do you mean that you do not buy it?

[Anonymous]

Small business here - if my DH and I divorce we can avoid the top rate increase - but put together we are paying about $6k more. I guess the attorney would cost more.

[Anonymous]

20:13, if we all divorced, we could afford the lower tax rate. Is that your family value?

[jsteele]

I was just listening to Keith Olbermann and he was talking about this. I was shocked that PricewaterhouseCoopers is a "small business".

[Anonymous]

Anonymous wrote:I don't buy this but I am small business and keep in mind that people will not expand and have already cut jobs to stay under.

Bullshit. You're going to forego expansion and more profits just because of taxes? How dumb a business plan is that?

[jsteele]

Anonymous wrote:

Anonymous wrote:I don't buy this but I am small business and keep in mind that people will not expand and have already cut jobs to stay under.

Bullshit. You're going to forego expansion and more profits just because of taxes? How dumb a business plan is that?

Agreed. Why would they "already cut jobs"? There hasn't been a tax increase yet and might not even be one. Moreover, cutting jobs might actually increase their income and make things worse for them if there is an increase.

[Anonymous]

Anonymous wrote:I don't buy this but I am small business and keep in mind that people will not expand and have already cut jobs to stay under.

If this is how you do the math, you have bigger worries than the tax code. I'd hire an accountant if I were you.

[Anonymous]

The Republican myth of small business is a complete illusion. Federal income tax, in general, taxes corporations on their net income. A corporation pays income tax on its net income, then distributes some of that net income as dividends to stockholders, and some stockholders pay income tax on the dividends. In the tax world, this is called double taxation of income earned at the corporate level. This is very common all over the world. Federal tax law, however, has several exceptions where there is no tax at the corporate or entity level. These are called pass-thru entities and include partnerships, limited liability companies and S corporations. Not all businesses can operate through pass-thru entities, but most can. In simple terms, pass-thru entities have fewer owners, and the ownership interetes are not traded publicly (on a stock exchange). So, many real small businesses, such as the neighborhood dry cleaner, operate through a pass-thru entity. There are, however, many very large businesses that operate through these types of entities. Accounting firms (including Price Waterhouse), all law firms, hedge funds, private equity firms, venture capital firms, real estate investment firms, doctors, and most of the businesses on any list of America's largest private companies operate typically through pass-thru entities. Bechel, the largest contractor in the world, operates as a pass-thru entity. So, these are not really small businessese in any real sense.

[Anonymous]

Remember, folks, lots of small businessmen are Joe the Plumber types who either (1) don't get the concept of marginal tax rates and/or (2) are convinced they're going to make $500k a year any day now.

(2) is not really mockable and is admirable. I mention it because that is how many small business owners think.

But if you refuse overtime, etc., because you think your taxes will go up, you deserve all the mocking you get.