Obama’s Tax Plan and Small Businesses

[DirtyFeetDesigns (heb1976)]

What do you think about this?

My husband was listening to Rush Limbaugh today on the way home from work and he was talking about this on his show. I personally do not listen to Rush - but he likes him. So I did a little searching about this plan. I own my own business - so this is a concern for me.

Obama says : “Only a few percent of small businesses make more than $250,000 a year. So the vast majority of small businesses would get a tax cut under my plan.”

The US Small Business Administration (SBA) (http://www.sba.gov/services/contractingopportunities/sizestandardstopics/size/index.html) defines a “small business” according to its average annual receipts or the number of its employees. Here are examples from the SBA’s Table of Small Business Size Standards (http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf) setting forth the maximum average annual receipts by industry that a business can have and still be classified as a small business:

Crop production of all types — $750,000
Animal production except for cattle & chicken/eggs — $750,000
Cattle feedlots — $2.5M
Chicken/egg production — $12.5M
Forestry & logging — $7M
Fishing — $4M
Irrigation, sewage, water supplies — $7M
Housing construction — $33.5M
Heavy and civil engineering construction — $33.5M
Dredging and cleanup — $20M
Concrete, framing, and other housing contractors — $14M
Car dealers — $23-29M
RV, motorcycle, & boat dealers — $7M
Furniture, hardware, clothing & sporting good stores — $7M
Electronic stores — $9M
Supermarkets, gas stations & department stores — $27M
Pharmacies — $7M

Now I am going to post this link from Rush's website (http://www.rushlimbaugh.com/home/daily/site_101308/content/01125108.guest.html). You can choose to read it or not. What I do ask is that you be open minded about it if you do read it. He broke it down in laymen terms. I actually understood it. Now trust me ... I am looking around to find someone else (less biased) to break it down so I can understand. I will admit I am not the smartest tool in the shed, and when it comes to numbers ... forget it. If someone can point me in the another direction to explain it better for me ... please do.

[NellieRose]

Here's a link to Obama's tax plan....it says Capital Gains taxes would be eliminated for Small Businesses.

http://www.barackobama.com/pdf/taxes/Tax_Plan_Comparison_FINAL.pdf

I can't read any further than that as I am exhausted.

[HLWalter725]

I read the first couple of sections and please dont make me read anymore. ;) I really don't like Rush, so I'm admitting ahead of time that its hard for me to read this without a bias -- I'd rather listen to O'Reilly.

The only thing that strikes me as I read the amount I read is that I think we need to determine where the $250,000 is coming from. Does Obama mean companies Net or Gross earnings?? Because I was thinking it meant AFTER all things such as payroll, overhead, costs and expenses, pure profit. The way I see it, Rush's examples are coming from BEFORE all those things. Those figures could be vastly different. My husband works for a "small" business of 100 employees. Its a several million dollar business, but in the ten years he's been there they've never turned a Net Profit over $500,000, and most years it was well below the $250k.

I also want to say that I've been getting really worked up over some of the different plans from both candidates and have come to the realization, that these are just ideas. Ideas that indicate what a candidates priorities are, but just ideas nonetheless. These ideas will have to go a lot further and be changed and massaged and argued and played with before either potential president will be able to get them passed. I'm trying to remind myself this not only with this plan for Obama, but also for McCain's healthcare plan, a plan I despise.

[~ashleigh]

The only thing that strikes me as I read the amount I read is that I think we need to determine where the $250,000 is coming from. Does Obama mean companies Net or Gross earnings?? Because I was thinking it meant AFTER all things such as payroll, overhead, costs and expenses, pure profit. The way I see it, Rush's examples are coming from BEFORE all those things. Those figures could be vastly different.

That is my thought as well. I haven't been able to determine the answer yet, but it would be an important clarification in order to take Rush's argument into consideration.

[DirtyFeetDesigns (heb1976)]

I agree with you. I do not like Rush either, as I said. It was hard for me to read it too ... but as I started reading it ... I was actually understanding, which with numbers, is hard for me. You are right ... he needs to specify whether it is on net or gross. If it is after overhead, payroll and such ... then ok ... if not, then look out.

That's why I want some input ... some sources maybe ... thoughts.

[4noisyboys]

I don't think that Rush is wanting people to think too much about it and really dig in and find answers. I think he's just like for you to listen to what he says, and take it at that.

[Gina.Maria]

No one is taxed on gross income. It's never been in question. All tax tables use the Adjusted Gross Income as a basis. All operating costs are deducted before tax is determined.