At least 620,000 small businesses would see their taxes go up if President Obama’s plan to to raise taxes on those earning more than $250,000 goes into effect, according to statistics based on the White House’s own estimates.
President Obama is hoping to minimize the PR fallout from his proposal to allow the Bush tax cuts to expire for high earners, noting in remarks Monday that some 97 percent of small businesses – many of which file under the individual tax code – would not be affected.
Obama Monday suggested that the number of small businesses affected was trivial and consistent with his intent not to raise taxes on small business:
Most people agree that we should not raise taxes on middle-class families or small businesses — not when so many folks are just trying to get by . . . The proposal I make today would extend these tax cuts for 97 percent of all small business owners in America. In other words, 97 percent of small businesses fall under the $250,000 threshold. (Applause.) So this isn’t about taxing job creators, this is about helping job creators. I want to give them relief. I want to give those 97 percent a sense of permanence.
What this obscures is that more than 99 percent of all businesses in America qualify as small businesses, so even a minor percentage is a huge number.
The White House later released information stating that 2.7 percent of small businesses would take a hit on their taxes. According to the Small Business Administration, there are 23 million small businesses in the United States, so 2.7 percent would amount to 621,000 of them.
This is if you accept Obama’s math. Republicans are suggesting that some 940,000 small businesses would be affected by Obama’s tax proposals.