Small Business Tax Relief

From dKosopedia

Categories: Taxes | MemeTank

The Bush tax cuts do not significantly benefit small business as advertised. For example, only 1.3% of taxpayers with small business income (defined as income from sole proprietorships, partnership, S corporation or rental income) received a benefit from the reduction of the top marginal income tax rate from 39.6% to 35%, and those taxpayers had an average income of $1.5 million. Likewise, only 1.3% of taxapyers with small business income are subject to the next lower tax bracket. Moreover the definition of small business owner which permits 1% of taxpayers with such income to benefit includes people like George W. Bush and Dick Cheney whom most people would not view as small business owners: a third of such individuals have exclusively passive investments in closely held businesses or rental properties.

Likewise, only 340 estates anywhere in the United States, in which a majority of the assets were small business or farm assets (defined as businesses worth $5,000,000 or less), hence making the possible need to liquidate the estate a concern, paid any estate taxes at all in 2004. With the estate tax rate rates scheduled to take effect in 2009, this number drops to 50 estates per year (180 per year if all estate in which a majority of assets were business or farm assets without regard to the size of the business or farm) were included. Thus, estate tax repeal in 2010 will impact only a minscule number of businesses, while resulting in tens of billions of dollars a year in tax revenue lost.