Obama's plan is to roll back the Bush tax cuts on the top two tax brackets. In practice, this means that people with income above $200,000 for single people and $250,000 for couples would see taxes increase.
Now what does this mean for small businesses? It's not as easy as you might think to identify small businesses via the tax code. But there are several typical ways that small business owners pay their taxes, usually by declaring business income on their individual tax returns. Many people who declare business income are small businesses, though the group also includes professionals like lawyers, authors, or public speakers.
Looking at all the tax filers who report any business income at all, the Tax Policy Center confirms that about 2 percent will see their taxes increase under Obama's plan.
In an effort to focus more effectively on small business owners, the Tax Policy Center did an additional analysis where they looked at people who reported business income that accounted for at least 50 percent of their income. This means people who derive a significant living off their business income.
In 2007, about 2 percent of those tax filers would have made enough money to see a tax increase under Obama's plans.
There is a small bit of uncertainty in the best data available; it includes some people who we would not think of as traditional small business owners. But still, Obama's statement during the debate that "98 percent of small businesses make less than $250,000" matches the findings of a respected, non-partisan group of tax analysts. For that reason, we rate Obama's statement True.
