Speaker of the House John Boehner is continuing to reassert the myth of the small business owner. I'm all for small businesses. But they're not what Boehner claims them to be. Speaker Boehner claims that half of the wealthiest Americans are small business owners. Boehner and his staff backed up his claim by citing a study from the President's Council on Jobs and Competitiveness, which PolitiFact summarized by stating "many small businesses file their taxes as individuals, not corporations, and 53 percent of all business income is taxed through the individual code." While this certainly shows that some small business owners would be taxed at a much higher rate, it does not necessarily support Boehner's statement. PolitFact summarized the findings from the Joint Committee on Taxation (linked above) to show that 3.5% of taxpayers with business incomes would fall into the top brackets under President Obama's proposal.
PolitiFact summarized the findings of another agency, the Office of Tax Analysis at the Treasury Department. They defined what a small business was. PolitiFact quoted the study as follows:
- Only one-fifth of small businesses are employers, using their definition.
- Only 8 percent of small-business owners have income of $200,000 or more. So 92 percent of small-business owners wouldn’t have been affected by Obama’s proposal.
- Slightly more than half of small businesses reported total income of less than $50,000, and half of those businesses reported a tax loss for the year.
- Only 0.5 percent of small businesses reported a profit in excess of $1 million. For those businesses, investment and rental income comprised roughly half of their reported income.
- Of the taxpayers in the top two brackets that would be increased, only 11 percent reported any small-business income, and only 9 percent qualify as small business owners.