Most small businesses are run as LLC, sole proprietorship or S-corps. These small business taxes are passed through the business owner’s income tax.
For example: Let’s say a small business makes more than $250,000 for tax purposes, but the owner can only take a salary of $90,000. The business income passes through to the owners’ personal income tax causing the owner to pay taxes on the $250,000!
Often times, these same small business owners can take dividends in order to pay their high business tax. With Obama’s proposed increased tax to “the wealthy,” many small business owners will unfairly be taxed as “wealthy.” On top of that, Obama proposes to increase dividend taxes from 15 percent to 39 percent!
The USA already pays the highest corporate taxes in the world. We need to close unfair tax loopholes for large corporations, not add more taxes to struggling small businesses! Or many small businesses will be laying off rather than hiring. This will not help our economy.