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Small Business Owners' Guide to the Election
By: Kent Hoover, Bizjournals
Posted: October 17, 2008
page 2 of 13
Rates for other income brackets would be unchanged under Obama's plan.
Earnings at most small businesses are passed through to their owners for tax purposes and are taxed at individual income tax rates.
Only 2 percent of taxpayers with small business income will pay taxes at the two highest rates in 2009, according to the Tax Policy Center. McCain, Obama on taxes
John McCain’s plan:
- Individual income tax: Keep two tax rates at 33 percent and 35 percent.
- Corporate tax: Reduce tax rate from 35 percent to 25 percent.
- Capital gains: Maintain 15 percent tax rate.
- Estate tax: Collect 15 percent tax on estates worth more than $5 million.
Barack Obama’s plan:
- Individual income tax: Increase top two rates to 36 percent and 39.6 percent.
- Corporate tax: Reduce tax rate for companies that expand or start operations in the United States, while repealing breaks for companies that retain earnings overseas.
- Capital gains: Increase rate to 20 percent for individuals making more than $200,000 and eliminate tax on investments in small businesses and startups.
- Estate tax: Collect 45 percent tax on estates worth more than $3.5 million.