Can small biz owners dodge new tax?

President Barack Obama listens to a question.

TEXT OF STORY

Bill Radke: President Obama wants to finance health care reform by rolling back tax cuts and deductions for people earning more than $250,000. Republicans say that tax increase will punish small businesses. How true is that? From the Entrepreneurship Desk at Oregon Public Broadcasting, Mitchell Hartman reports.


Mitchell Hartman: Most of us know a lot of small-business owners who don't make anything like $250,000. But that's beside the point, says Martin Regalia. He's chief economist for the U.S. Chamber of Commerce.

Martin REgalia: Many of the most successful small businesses, the ones that are making money growing and are therefore able to create jobs, will come under this new tax.

But Rosanne Altshuler of the nonpartisan Tax Policy Center insists most small-business owners will dodge this bullet completely. Among taxpayers who get most of their income from their own businesses, she says:

Rosanne Altshuler: More than half have income below $30,000, and 80 percent make less than $100,000. So most business owners are safe from Obama's individual income tax increases.

In the end, it's the biggest small businesses that have the most to lose. A recent survey by the National Federation of Independent Business found that nearly half of business owners with 20 to 250 employees earn over a quarter-million-dollars.

I'm Mitchell Hartman for Marketplace.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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