Small Businesses...Really?
The GOP is making much about American small businesses, and the impact on them of letting Bush era tax cuts lapse. Well, guess what...They're not talkin' about the Mom & Pop store around the corner.
The SBA defines as a small business, any business which meets the following criteria:
- 500 or fewer employees for most manufacturing and mining industries (a few industries permit up to 750, 1000 or 1,500 employees)
- 100 or fewer employees for all wholesale trade industries
$6 million per year in sales receipts for most retail and service industries (with some exceptions)
- $27.5 million per year in sales receipts for most general & heavy construction industries
$11.5 million per year in sales receipts for all special trade contractors
- $0.5 million per year in sales receipts for most agricultural, forestry and fishing industries (Source: Federal Access)
The GOP is talking about something else entirely. They are talking about Chapter S corporations. These corporations are defined by the following criteria:
* Must be an eligible entity (a domestic corporation, or a limited liability company which has elected to be taxed as a corporation).
* Must have only one class of stock.
* Must not have more than 100 shareholders.
o Spouses are automatically treated as a single shareholder. Families, defined as individuals descended from a common ancestor, plus spouses and former spouses of either the common ancestor or anyone lineally descended from that person, are considered a single shareholder as long as any family member elects such treatment.
* Shareholders must be U.S. citizens or residents, and must be natural persons, so corporate shareholders and partnerships are generally excluded. However, certain trusts, estates, and tax-exempt corporations, notably 501(c)(3) corporations, are permitted to be shareholders.
* Profits and losses must be allocated to shareholders proportionately to each one's interest in the business. (Source:Wikipedia)
These corporations are also known as "pass through" corporations, as corporate income or losses pass through to the share holders.
The real focus of GOP tax policy was made clear in a September 12 interview (5 minutes in) on "Face the Nation" with House Minority Leader John "The Boner" Boehner(R-OH). Boehner admits that only 3% of small businesses would benefit from continuing the Bush era tax cuts. This 3%, however accounts for around half of all "small" business income. H&R Block has some 1.5.million small business customers, yet only about .005% of them would benefit from extending the tax cuts for the wealthiest Americans...Tax cuts Boehner and the GOP are fighting tooth-and-nail for.
Some of the corporations that meet this loose definition of a "small business" include Koch industries...which is busy funding the pseudo-populist tea-bagger movement, Bechtel, the Chicago Tribune, and the list goes on, with some 20,000 S corps with more than $ 50 million in receipts in 2008. Small, not in terms of income, or number of employees, but in the number of owners.
And it is this 3% of "small businesses", which account for 50% of small business income that John "The Boner" Boehner and Mitch "McChinless" McConnell are interested in benefiting. Sound familiar? It should. The Bush era tax cuts...The same ones the congressional GOP leadership want to extend...saw the greatest benefit go to the top 2-3% of income earners in this country.
SO when you hear The Boner or McChinless talk about "small business"...It's not the small business owner who come to fix your plumbing or do your landscaping, or owns the diner down the street where you meet your neighbors for coffee. They're talking about, as usual, the wealthiest Americans who hold more of the national wealth than at nearly any time in US history.
Wealth, Income, and Power
