McCain's Small-Business Bunk

Summary
McCain has repeatedly claimed that Obama would raise tax rates for 23 million small-business owners. It's a false and preposterously inflated figure.

We find that the overwhelming majority of those small-business owners would see no increase, because they earn too little to be affected. Obama's tax proposal would raise rates only on couples making more than $250,000 or singles earning more than $200,000.

McCain argues that Obama's proposed increase is a job-killer. He has a point. It's true that increasing taxes on those at the top would leave them less money for other purposes, including investment and hiring in the case of business owners. But the number of business owners who would see their rates go up would be only a small fraction of what McCain says. Many would see their taxes go down.

Analysis
Sen. John McCain has been making this false claim over and over, starting with a July 7 speech announcing his "jobs for America" plan:

McCain, July 7: Senator Obama's tax increases will hurt the economy even more, and destroy jobs across this country. If you are one of the 23 million small-business owners in America who files as an individual rate payer, Senator Obama is going to raise your tax rates.

He repeated it in an address to the League of United Latin American Citizens the next day:

McCain, July 8: Keeping individual rates low isn't intended as a favor to wealthy Americans. 23 million small-business owners pay those rates, and taking more money from them deprives them of the capital they need to invest and grow and hire.

He said it again at a campaign event July 9:

McCain, July 9: If you are one of the 23 million small-business owners in America who files as an individual rate payer, Senator Obama is willing to raise your tax rates.