How many people/families who make over 200K/250K a year (i.e. those that would be impacted by President Obama’s proposed tax increases) own a “small business” vs are just making that amount of income because either their wages are very high or because of capital gains?

Thanks!

You’ve listed a number of ways they are disadvantaged. What you’ve left out is “taxcode”. My suspicion is that you’d find that small businesses pay higher rates than the large ones– many of which we’ve recently been informed by the media pay little or nothing at tax time.

The large firms do so by targeted loopholes. Small businesses can’t pay the lobbyists to buy the loopholes.

An advantage to streamlining the taxcode, removing the loopholes, and lowering the overall rate (even if it isn’t revenue neutral– even if, as you prefer, that leads to revenue increase) is to reduce the advantage that the taxcode provides large businesses over small ones.

According to your graph, if you considered small businesses to be anyone who employs less than 500 people, those “small businesses” would account for more than the large businesses. By splitting this group into two, you can tell the opposite story.

If you were to split the large businesses into “large” and “huge” you’d get yet another story. How to mislead with graphs…

I speak regularly speak to workers who are not allowed to leave their work stations for any reason outside legally required break periods. Yes, that includes bathroom breaks. More than one of them has told me they regularly wet themselves rather than risk losing their jobs (diabetics and pregnant women are particularly vulnerable). This kind of unconscionable treatment, along with all the accompanying shortcomings in wages and benefits you might expect, is not something you see in small firms. It’s unique to the dehumanhizing world of the huge employer.

I grant you that not all small firms are run by saints, nor do they all treat workers well. That said, I’ll take a small employer over a huge one any day.

“For these data, firms are identified by the unique Employer Identification Number (EIN) issued by the IRS. Multiple establishments that share the same EIN are counted as a single firm, and employment from each establishment is aggregated to determine employment for the firm as a whole.”

I believe this is not consistent over franchises–some have their own EINs and others don’t.

Second, it would be interesting to see what the data show on the number of small businesses owned by individuals who make less than $250,000 per year versus the number of small businesses with owners who make more than that amount, and their respective job creation amounts.

The questions would be: do owners of small businesses where the owner makes less than $250,000 per year (which would be unaffected by Obama’s proposal to only let the tax rates revert to pre-Bush tax rates on those who make more than that amount)provide the most job creation in the small business category?

Also, what is the evidence that owners who make more than $250,000/yr would not create more jobs even under Clinton-era tax rates? It is possible that such wealthy owners would continue to invest in their businesses by such actions as hiring more employees to increase business revenue and their wealth, even if they were taxed at a higher rate.

In a tough employment market, entrepreneurship may seem attractive. However, the risk exposes the individuals and the system to worsening conditions in the long run. The investment in the business is lost to the investor. There is an opportunity cost to the savings and investments portion of GDP. And there is an individual with lower demand and greater need for safety nets in old age.

Less than 1% of registered businesses in America employ over 50% of the workforce, in fact its like 0.3%.

Think about what this means in terms of the power that this small number of firms holds…