FactCheck.org: McCain’s Small Biz Tax Attack Bogus
Albuquerque, N.M. — Last week, Sen. John McCain criss-crossed the country claiming Sen. Barack Obama would raise taxes on 23 million small-business owners. There’s just one problem — it’s not true. According to a new analysis by FactCheck.org, the truth-parsing Website from the University of Pennsylvania’s Annenberg Public Policy Center, Obama’s economic plan would indeed mean higher taxes for some of the nation’s wealthiest small-business owners, But the vast majority would see no change or even a tax cut. The analysis found the 23-million figure cited by the McCain campaign to be "outdated, inflated" and "inapplicable." From FactCheck.org:
[U.S. Census Bureau and Small Business Administration] count as a "small business" anyone who reported as little as $1,000 of business receipts. By that very broad definition, John McCain himself is a "small-business owner," because his tax return shows Schedule C income from book royalties. For that matter, Barack Obama would also be a small-business owner, by virtue of his book income. As would President Bush and Vice President Cheney, as we pointed out in 2004. Of the 26.8 million that SBA counts as "small businesses," fewer than 6 million are actually "employer firms" with any payroll.
From this, we must conclude that to arrive at his 23 million figure, McCain is counting mostly "business owners" with no workers, including those who simply report small amounts of income from sideline or freelance work. McCain is arguing that Obama’s tax increase would "destroy jobs," but he’s counting mostly firms that don’t produce any.
That in itself is seriously misleading. If McCain wants to focus on the effects of Obama’s plan on employment, he would do better to confine his count to employers – the just under 6 million firms that actually have workers. And even that figure wouldn’t be applicable because Obama’s tax increase wouldn’t fall on all employers, only on those in the top two income tax brackets.
The analysis found the actual number of small-business owners who would face higher taxes under Obama’s plan would be "probably far below 663,608 [the number of small-business owners who make more than $200,000], and certainly a far cry from McCain’s ridiculously inflated 23 million figure." It also found that "many, if not most" small-business owners would receive a tax cut.
FactCheck.org has been working overtime recently because of the McCain campaign. The Website found a recent McCain Spanish-language radio ad in support of free trade had "nearly all its facts wrong," and it refuted the McCain campaign’s claim that Obama voted to raise taxes on workers making as little as $32,000 per year. As we previously noted, McCain also made some less-than-true statements about his voting record on veterans’ issues. For the record, FactCheck.org also found Obama has embellished his biography and his legislative resume.
Almost daily, McCain vows to run an honorable — we assume that also means honest — campaign. If he doesn’t start cleaning up his truth-telling record, he’s not going to live up to that promise.