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Corporate Tax Rate Impact on Small Business Owners

The sale of garden seeds and vegetable plants has exploded at Rick's Garden Center. Owner Mike Estes says the slumping economy means more folks are growing their own gardens to save on their grocery bill.
Mike's also looking at his own bottom line these days. He describes himself as "Joe the Gardener"... The independent small business owner ... And Luisa Graff... owner of Luisa Graff Jewelers says she too fits that same description.
Both have been in business 20-plus years... putting to work anywhere from 15 to 20 people.
They're studying components of both Senator Barack Obama and Senator John McCain's plans... specifically the corporate tax rate.
The Walll Street Journal found under an Obama administration... the small business owner would have to pay more... seeing the rate go from 35 percent... to almost 40 percent.
McCain's proprosal calls for the rate to drop from 35 to 25 percent. Mike Estes says, "They have to make it condusive for the small business, not only just to survive, but to thrive... to be able to give those bonuses, incentives, raises to the employees."
Here's what it looks like using the Wall Street Journal's figures for the corporate tax rate.
For someone making 250-thousand dollars a year... they'd pay 100-thousand dollars to Uncle Sam under Obama and $62,500 under McCain.
After owners repay their original capital... their business loans of $125,000.... they're putting in their pocket $25,000 under Obama's plan... And $62,500 under McCain's plan.
Both Estes and Graff say McCain's plan would let them pocket around $50,000 for themselves and use the leftover $12,500. to re invest in their companies."
Graff adds, "With less taxes you can invest more in your business and you can pay the loans ...you know with after the tax money... so you grow the buisness and you create jobs."
I called Obama's national campaign headquarters several times today to get more on Obama's plan... specifically rebates and other measures impacting small business owners, but no one returned my calls.
His website does mention his goal to eliminate special interest loopholes and deductions.


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