Quote:Consider this.  Raising taxes for someone that earns say $250,000.00 per year on paper (tax return).  That $250,000.00 might be what was brought in by a small business owner that uses a portion of that income to reinvest or expand their business.  The business owner reports the income on their personal tax form, and would be penalized under a Clinton or Sanders plan.

 

I'm not saying that all small business owners do their taxes this way, but there are some that do.  The current Clinton and/or Sanders vision for taxes would actually place a larger burden on the small business owner.

 

I've done taxes before in this manner, as a "sole proprietorship".  What you've described is not quite what happens, if you fill out the form correctly.  Business expenses are deductible on Schedule C, and don't count in your net income.

 

But what DOES happen is you pay Social Security tax, as an employee and employer, on the 1099 income you've received before you get your deductions.  It's an incredible disadvantage, which is only one reason the S-Corp and LLC options are almost always a better way to construct your company.

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