662,000 American Dreams

662,000 American Dreams (Kat-Mo)

Out of everything said at the debate last night, the thing that kept going around and around in my mind was Senator Obama's claim that "only 2% of small businesses" would be affected by his plan to raise taxes on incomes of $250,000 or more. As if this had no real impact on the growth of small businesses or the number of people employed.

Small businesses are responsible for 80% of the job creation in the United States every year. While many small businesses only employ the owner, there are literally millions of small businesses that employ 1 to 499 employees. That's the cut off for small businesses that Sen. Obama would like to re-define. He wants to classify single owner, single employee businesses as "not small businesses as we invision them". Exactly what else should they look like if not someone working for themselves? Isn't that the American Dream?

Of course, Sen. Obama's entire purpose is to whittle down this number in the Public's mind so that when he talks about raising taxes he and we can pretend that it isn't really that big of a deal. Well, if it isn't that big of a deal, why do it at all?

The truth is, it is a big deal and it is a lot of money. There are over 662,000 small businesses making more than $250,000 a year in the United States. These are not "fat cat, mega corporations". They range from single owner/employee to small manufacturers with 500 employees or less. Together, they employ millions of Americans.

These are companies like the small manufacturer in New Jersey with 100 employees who makes special ballistic glass inserts for military jets and vehicles that protect our men and women in uniform. They are companies like metal fabrication company right here in Kansas City that employs 50 and makes custom steel parts to any specification for companies all over the world.

Or the plastic manufacturer who employs 150 that contracts with auto manufacturers to make small parts for cars. A manufacturer who is already having to scramble to make ends meet due to the rising cost of fuel and materials, who is trying to find new business to keep his company open and his people employed since the auto manufacturers, his biggest contract, started slowing down and closing their factories.

Or the solar light company, producing solar street lights that have made Iraq and many other small countries with poor electrical infrastructure safer and energy efficient. With better lighting, businesses stay open longer and help developing economies. This is a "small business", but they had an outsized impact on the war. The lights helped bring down the violence in Iraq and make our men and women in uniform safer so they can return home. These same lights are being installed today in cities and villages in Afghanistan. They employ over 100 people in the development and manufacturing of these lights. They are one of the "small businesses" that make over $250,000 a year that Sen. Obama wants to tax.

Then there is the electrician who lives down the street. He doesn't "look like a traditional small business". He doesn't have a "store front". He employs three other electricians. His "store front" is the vans with his company name on the side. Just like Joe the Plumber, he built his business over time with long hours and his own money. Then he "spread the wealth" the right way by employing three other men who earn a decent living and support their families.

These are the "small businesses" that Sen. Obama wants to increase tax on as if they were truly some giant conglomerations owned by cigar smoking, fat cats getting rich off someone else's sweat. These are people who have been trying to build the American Dream and, through their hard work and perseverence, have given other Americans the opportunity to work towards their dreams, too.

In a recent ad, Sen. Obama claimed that a small company that traditionally made the thread for the United States flags moved their jobs overseas because they received "tax breaks" from our government to do it. Talk about dishonest. If Sen. Obama was honest about why that company moved, he would have to tell people that it wasn't because of "tax breaks", but because our government imposes extraordinary tax burdens on small businesses compared to other nations. The same taxes that Sen. Obama wants to raise. The same taxes that drive companies out of business and out of the United States.

Sen. Obama claims that it is "only 2%" of small businesses, but they represent the largest income and employment opportunities of all small businesses. These are the companies that are most likely to expand and create jobs in the United States. These are the small businesses that help keep America's economy going in good times and bad.

These companies represent 662,000 American Dreams.

Does it make sense to tax these companies during an economic down turn when they are already trying to keep their doors open and their people employed? Does it make sense to take money out of their pockets when they could use that money to expand their business and employ more people?

Sen. Obama claims he has the plan to help restore our economy. Instead, his plan looks like an assault on the American Dream.

Posted by: Open Blog at 12:30 PM

http://app1.sba.gov/faqs/faqIndexAll.cfm?areaid=15

1. What are small business size standards?

The term "size standard" describes the numerical definition of a small business. In other words, a business is considered "small" if it meets or is below an established "size standard."

2. How does the SBA define a small business?

A small business is an concern that is organized for profit, with a place of business in the United States, and which operates primarily within the United States or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor. Further, the concern cannot be dominant in its field, on a national basis. Finally, the concern must meet the numerical small business size standard for its industry. SBA has established a size standard for most industries in the U.S. economy. The most common size standards are as follow:
* 500 employees for most manufacturing and mining industries
* 100 employees for all wholesale trade industries
* $6.5 million for most retail and service industries
* $31 million for most general & heavy construction industries
* $13 million for all special trade contractors
* $0.75 million for most agricultural industries

About one-fourth of industries have a size standard that is different from these levels. They vary from $0.75 million to $32.5 million for size standards based on average annual revenues and from 100 to 1500 employees for size standards based on number of employees. Several SBA programs have either alternative or unique size standards, such as the Small Business Investment Company Program.


7. A Federal agency wishes to grant regulatory relief for small business entities. Must it use SBA's size standards to define small business?

Generally, federal agencies use the SBA’s size standards, which are defined in the Regulatory Flexibility Act. However, if another small business definition is more appropriate to its needs, that agency may consult with SBA's Office of Size Standards to determine if it should request a more suitable small business definition from the SBA Administrator. See 13 CFR §§121.901 thru 904.

8. How do Federal Agencies use the SBA size standards?

With few exceptions, all Federal Agencies use the size standards established by SBA. In addition, many other political entities, such as state and local governments, adopt SBA size standards. Most Federal Agencies reserve all or some of their programs for small businesses. For instance, the SBA has a number of loan programs for qualified small businesses. Most Agencies set aside a share of their procurement activity exclusively for small businesses.

Here is an idea. Lets not raise taxes on anyone. Infact lets get rid of the IRS..

Everyone be sure and vote for higher taxes though, that way we can be sure the correct higher tax wins.

And statistics on Non-Employer small businesses in Pennsylvania

http://www.census.gov/epcd/nonemploy...6/pa/PA000.HTM

In Pennsylvania in 2006 (the last year available) there were 742,056 small businesses with $34,231,371,000.00 in total receipts.

Funny how all the business owners I know are frantically running around their businesses cost cutting. Business is not off that much they are just terrified of what the three stooges are going to do to the economy.
By Halloween I will have cut at least $5,000 a year out of my expenses for my business. I'm still looking for more money. I had a part timer leave in early September and normally I would have replaced her. But with the possibility of Obama winning with Nancy and Harry along for the ride there is no option of waiting and seeing what is going to happen.

Before "retiring" I owned a small business (1 to 6 employees). When the gov'mint forced "Family Leave Act" was being debated and voted on, I had been under contract with the owner of another small business (50 to 60 employees) to build a larger printing shop.
The print shop owner decided his solution to not putting up with the Fed's B.S. was to lay off (I believe it was) 6 employees to reduce his workforce to 49 to stay under the mandate.

I think what a lot of people are thinking is "business owners making 250K or more are fat cats"

most people don't realize that for most small businesses to even consider staying a float (if they have employees) they need to be making well over 200K / year just to pay for the business to run

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Originally Posted by Dredly

I think what a lot of people are thinking is "business owners making 250K or more are fat cats"

most people don't realize that for most small businesses to even consider staying a float (if they have employees) they need to be making well over 200K / year just to pay for the business to run

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Clear something up for me because I suppose I don't understand. Are they talking income or revenue? I thought it is over $250k income(profit) which is a lot. However that would be after salary and such expenses. $250 of revenue is obviously not anything if you have employees.

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Originally Posted by brewguy

Clear something up for me because I suppose I don't understand. Are they talking income or revenue? I thought it is over $250k income(profit) which is a lot. However that would be after salary and such expenses. $250 of revenue is obviously not anything if you have employees.

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First it shouldn't matter if they are making over $250K or not in personal income/profit.

Second a lot of LLCs have to declare ANY cash left in their accounts at tax time as personal income even if it is just enough to keep the business open for the next 6 months. One of my former employers would give out large bonuses at the end of the year (think 12/28) to clear the books out for tax filing. Every January we were all sweating because we barely had enough to run the business for the next month let alone 3 months. We had to rely on lines of credit to pay the overhead.

Quote:

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Originally Posted by brewguy

Clear something up for me because I suppose I don't understand. Are they talking income or revenue? I thought it is over $250k income(profit) which is a lot. However that would be after salary and such expenses. $250 of revenue is obviously not anything if you have employees.

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Actually, $250k in profit for a lot of business's is very low. Just because you make a over all profit of $250k does not mean you are making tons of money, if you want to grow your business you have to put a huge portion of that back into it. You have to make sure that you have capital, and the ability to fix equipment, buy equipment, expand your employee base, and have enough in reserve to be able to pay your bills and employee's during slower parts of the year. In a personal point of view 250k seems like a lot, but in a business point of view it is not that big of a number. Of course every business is different and some require a lot less capital and cash flow. Equipment is very expensive and can be very costly to repair or replace, and a business can not make money if it does not have money in the bank to compensate for fluctuations.

I guess my point is, just because a company has a profit of 250k does not mean that it has no worries and is making bucket loads of money. When you start taking away from a company's profits you are forcing them to cut back in some ways to make sure that the company can operate, and sometimes that means less employee's. Which is not a good thing when unemployment is high.....