Small business make less than $250,000 /year - true?
October 17, 2008 5:47 AM   Subscribe

Factcheck: Obama claims 99% or so of small businesses make less than $250,000 a year. Is this true?
posted by stbalbach to Work & Money (9 answers total) 5 users marked this as a favorite
 
This question is to help settle a heated debate between friends. The problem seems to be how to define a "small business" and how to define making over $250k (owners salary, or business revenue etc..). Has Obama ever released any info about this claim and how he arrived at it?
posted by stbalbach at 5:50 AM on October 17, 2008


Obama is talking about business net profit. See this thread.
posted by muddgirl at 5:54 AM on October 17, 2008


Thanks - I didn't see that thread and it answers my question. I suppose that makes this question a duplicate and can be deleted unless anyone wants to expand on it further.
posted by stbalbach at 6:05 AM on October 17, 2008


Factcheck.org analyzed some of McCain's statements about Obama's tax plan, relative to small businesses. You might find that worthwhile.
posted by brandman at 6:07 AM on October 17, 2008


Small Business Administration provides official definitions of what constitutes a sm business & tracks all kinds of data, including tax returns: see table 1.4 on p. 15 of the most recent Small Business Economy report, released Dec 2007, which reports that out of a total 26.4M sm business tax returns, over 20.5M fall in the <$100,000 category.
posted by woodway at 6:07 AM on October 17, 2008 [2 favorites]


This post from the Tax Foundation is one source for fact checking on the candidates' tax-related statements in the most recent debate. They both lied a lot.
posted by Perplexity at 8:21 AM on October 17, 2008


It's also extremely notable that the "under-$250k == no new taxes" numbers refers to small businesses running as Sole Proprietorships and S-Corps, where the net profit from the business is reported on the owner(s)' 1040 (more or less as income).

The VAST majority of businesses that are making more than $250k in profit are C-Corps, not S-Corps or sole proprietorships.
posted by toxic at 9:33 AM on October 17, 2008


it sounds more or less true based on the few small business owners I know, but YMMV
posted by The Whelk at 12:43 PM on October 17, 2008


Woodway, thanks for bringing up the already existing data on what we typically call a small business.

None of the public discussion I've seen reference this - and often say Camp Obama has been vague or won't say.

Very mysterious that it's left out. How stoopid are we supposed to be? Sort of like how no one but Marissa Stole the Precious Thing will point out the role of the US Post Office in moving possibly incorrect voter registration forms to the county clerk. Not to mention the DMV and motor voter. Patty and Selma are going to hinky this election, you mark my words!
posted by Lesser Shrew at 7:32 PM on October 17, 2008


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