ABC’s “World News with Charles Gibson” had no problem with playing the role of campaign defender Oct. 16. The programs took aim at Joe “the Plumber” Wurzelbacher’s complaint-turned-McCain debate talking point about higher taxes under Obama. It didn’t address whether considering a tax increase in a weak economy is a dumb idea.
“This all began with an encounter Joe Wurzelbacher had with Obama in
Berman cited an unsourced statistic – one similar to a talking point Obama has used on the campaign trail – to suggest Wurzelbacher’s concern over higher taxes for his small business was unfounded.
“Which means right now, Joe could actually see a tax cut under Obama’s plan. In fact, some 95 percent of small businesses make less than $200,000,” Berman said.
It was similar to what Obama said at the town hall presidential debate on Oct. 7 [1], when he argued that “only a few percent of small businesses make more than $250,000 a year. So the vast majority of small businesses would get a tax cut under my plan.”
As a release from Americans for Tax Reform pointed out [2], the Obama’s number is incorrect and the organization cites the Internal Revenue Service.
“There are 28 million small business owners in the
And the $200,000 figure isn’t way under the limits of what could be defined as a “small business.” According to the Small Business Administration (SBA) Web site, a small business is defined as the following [4]:
“The Small Business Act states that a small business concern is ‘one that is independently owned and operated and which is not dominant in its field of operation.’ The law also states that in determining what constitutes a small business, the definition will vary from industry to industry to reflect industry differences accurately.”
Some examples of small business were compiled by “Patterico’s Pontifications” [5] from the SBA’s Table of Small Business Size Standards [6], which sets the maximum average annual receipts by industry that a business can have and still be classified as a small business – all which exceed $200,000 a year:
Crop production of all types — $750,000
Animal production except for cattle & chicken/eggs — $750,000
Cattle feedlots — $2.5M
Chicken/egg production — $12.5M
Forestry & logging — $7M
Fishing — $4M
Irrigation, sewage, water supplies — $7M
Housing construction — $33.5M
Heavy and civil engineering construction — $33.5M
Dredging and cleanup — $20M
Concrete, framing, and other housing contractors — $14M
Car dealers — $23-29M
RV, motorcycle, & boat dealers — $7M
Furniture, hardware, clothing & sporting good stores — $7M
Electronic stores — $9M
Supermarkets, gas stations & department stores — $27M
Pharmacies — $7M
There is one possible exception Berman pointed out – how small business owners file their taxes, whether as a corporation or as individual income. However, neither Obama, nor the ABC report specify if a small business is one which the owner files individually or as a corporation.
“True or false – it depends,” Berman said. “Obama has said he will raise taxes by some 3 percent on individuals making more than $200,000, and families making $250,000. Many people file their small business taxes as individuals. So, if Joe’s hypothetical company did make more than $200,000, he would see an increase.” So if Joe’s company was like 3 million others that make two-thirds of all small business profits, it would affect him.