Would Joe the Plumber be hurt by Barack Obama's tax plan?

Or Bob the Builder or Woody the Woodworker or Sarah the Small Business Owner for that matter?

Note that the question isn't about the genuineness of Joe the Plumber himself. It's now widely acknowledged that Samuel "Joe" Wurzelbacher, the newly minted symbol of small business ownership in America (thanks to John McCain), is not a licensed plumber in Toledo, Ohio, owes back taxes and had a suspended driver license when he lived in Arizona.

The real issue is the economic power of the so-called "small businesses" in this country.

So to start with, let's define our terms. Just what the heck is a small business? Put aside your warm-and-fuzzy image of Grandma and Grandpa running the five-and-dime on Ninth Street N. It turns out that nailing down a definition for "small business" is tough. It can be anything from a one-person home-based company to firms employing hundreds, according to a leading small-business advocacy group, the National Federation of Independent Business. "While there is no standard definition of a 'small business,' the typical NFIB member employs five people and reports gross sales of about $350,000 a year," the group explains on its website.

The government's Small Business Administration, which gives loans and advice to companies starting out and trying to grow, defines it this way: "The Small Business Act states that a small business concern is 'one that is independently owned and operated and which is not dominant in its field of operation.' The law also states that in determining what constitutes a small business, the definition will vary from industry to industry to reflect industry differences accurately." The SBA, as well as the census, specifically describes a small business as any taxpayer with more than $1,000 of income on Schedules C, E and F. That would make Obama, John McCain and countless others who don't have any employees "small businesses" (McCain and Obama because of book profits paid to them as freelance authors).

Anywhere from one-half to one-third of the work force is employed in companies considered to be small businesses.

And even as Wall Street crumbles and thousands in large firms lose their jobs, the Joe the Plumbers of the nation keep chugging away creating those new jobs. A report last month by ADP reported 28,000 new jobs in companies with fewer than 50 employees.

So, would higher taxes hurt these smaller companies and endanger that economic engine?

It's possible, although to a much smaller degree than the McCain campaign alleges, if at all. The tax increase that Joe the Plumber mentioned to Obama during their campaign encounter dealt with Obama's plan to raise taxes on people who make more than $250,000 in family income. An estimated 80 percent of small business owners have structured their companies so they pay their business taxes as individuals rather than corporations. And the Tax Policy Center estimates that 663,608 taxpayers with business income or losses would be caught in Obama's higher tax brackets. But drawing conclusions from those unrelated numbers is tricky, as the Annenberg School's Fact Check points out:

"Not all of those [663,608 affected taxpayers] can properly be called 'small-business owners,' however. Some are farmers. Many are lawyers, accountants or other professionals who get some of their income in the form of partnership distributions. Others may be passive investors in real-estate partnerships or similar investment arrangements and not really persons who own and manage a business."

As for Joe the Plumber, it remains to be seen if he would be affected. He hasn't bought his plumbing business yet, and he wouldn't pay the higher tax rate unless he generates profits that give him $200,000-$250,000 annually in taxable income. That would be a wildly successful plumbing business. Only 14 percent of NFIB business members say that they make that much money.

Joe admitted, by the way, that he doesn't fall into that higher tax bracket right now. "I want to set the record straight: Currently I would not fall into Barack Obama's $250,000-plus," he told reporters after the debate.

One final thing: If Joe the Plumber's hoped-for business takes off and makes him scads of money, the amount of higher taxes he would have to pay under an Obama administration would range from $0-$900. That hardly seems like it would screech his business to a halt. But it would buy a lot of pipe wrenches.

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