Obama Tax Plan Targets Successful Small Companies

Tuesday, 16 Oct 2012 07:46 PM

By Grover Norquist

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
From the ATR website.

The Obama-Biden tax plan calls for a hike in the small business tax rate from 35 percent today to over 40 percent next year.

President Obama and his supporters will often argue that “only” 3 percent of small business owners will be affected by his tax rate hike.

stop-obama.jpg
This stop Obama sign could be seen outside a presidential campaign stop in Glen Allen, Va.
(Getty Images)
While this is true, it masks the fact that this is a tax increase on one million successful small businesses (i.e. 3 percent of the 30 million small business tax returns filed annually).

The Obama-Biden plan will raise taxes on a majority of small business profits and hit those companies which employ a majority of Americans who work for small businesses. Here’s how:

Unlike corporations, small businesses usually don’t pay their own taxes. Rather, business profits flow through to the business owner. The business owner pays taxes on his or her small business by adding the profits to his or her income tax form. Therefore, personal income taxes are the same thing as small business taxes.

The Obama-Biden plan to raise the top two marginal income tax rates (from 33 and 35 percent today to 36 and 39.6 percent, respectively) is a hike in America’s small business tax rate. This does not include Obamacare’s 3.8 percent small business surtax.

According to the IRS, most small business profits face taxation in households making more than $200,000 per year. The IRS keeps track of two types of small business income: sole proprietors, and “pass-through” entities like partnerships and S-corporations.

A majority of small business profits will face a tax rate hike under the Obama-Biden plan. There are 30 million tax returns reporting small business income. On net (profits reduced by losses), these owners report business profits of $590 billion. A large chunk of this net profit — $477 billion — faced taxation in households making more than $200,000 per year.

Sole proprietors: There are 22 million tax returns reporting sole proprietor income. On net (profits reduced by losses), these owners report business profits of $245 billion. A large chunk of this net profit — $80 billion — ace taxation in households making more than $200,000 per year. Thirty-seven percent of sole proprietor profits will face a tax rate hike under the Obama-Biden plan.

S-corporations and partnerships: There are 8 million partners and S-corporation shareholders. On net (profits reduced by losses), these owners reported business profits of $345 billion. Virtually all of this profit faced taxation in households making more than $200,000 per year.

Aggregate pass-through entity profits will almost entirely fall in households making more than $200,000 per year. These are real small businesses. For example, there are 250,000 doctor and dentist offices organized as S-corporations or partnerships. They employ millions of workers making less than $250,000 per year. These jobs are endangered by the Obama-Biden tax rate hike.

The Obama-Biden tax hike plan will kill small business jobs. Obama and Biden claim they are raising taxes on “millionaires and billionaires” but are actually targeting successful small companies. A new study by Ernst and Young projects that this tax rate hike will kill 710,000 small business jobs.

Grover Norquist is president of Americans for Tax Reform, a coalition of taxpayer groups, individuals, and businesses opposed to higher taxes at the federal, state, and local levels. The coalition organizes the Taxpayer Protection Pledge, which asks all candidates for federal and state office to commit themselves in writing to oppose all tax increases. Read more reports from Grover Norquist — Click Here Now.

© 2014 Newsmax. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Lois Lerner's Latest Email Outrage

Thursday, 31 Jul 2014 10:31 AM

In response to the latest Lois Lerner evidence released by the House Ways and Means Committee, I have released the follo . . .

Letter Supports Limiting IRS

Friday, 18 Jul 2014 10:22 AM

An ongoing investigation has revealed the IRS unfairly targeted conservatively aligned organizations from 2010 to 2013. . . .

Bill Provides Business Tax Relief

Tuesday, 08 Jul 2014 10:18 AM

The U.S. House this week will consider H.R. 4718, a bill introduced by Congressman Pat Tiberi, R-Ohio, to make permanent . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved