Originally Posted by Phory

I have a small software and electronics business. I've been in business for about 5 years. I have 2 parners and 1 full-time employee as well as a few contractors I regularily hire. Our business is what you call an S-Corporation. Among other things, this means that the corporate taxes are payed out of my partners and my personal income tax. Over the past 5 years I've never had less than $100,000 as my income according to my tax return...but before you congratulate me on how-well I'm doing realize that that isn't money I get to spend. Most of that has to be saved for things like future investments (The nature of our business is that we develop a lot of projects with only a small percentage of which ever actually end up getting sold, so we always have to have money available for developing prototypes.) in product development and to buy inventory for the next year. In the past 5 years the actual income that I have payed myself out of our business has ranged from $24,000 to $70,000. For example the year my partners and myself payed ourselves 20k we all had over 100k dollars worth of income and payed taxes as if we were in that tax bracket (since technically we did make that money.) even though like I said that isn't money we got to spend on ourselves. Most of the "Rich" that Kerry wants to raise taxes on, aren't really rich. They are people like me who have S-Corporations. Even though my tax return says I make six figures I really don't. Most of my friends would probably be surprised to learn that I have a "six figure income". I live in an apartment not a house. I drive an ordinary car (subaru), etc...I'm not complaining. I love my life. I just want to point out that if Kerry raises taxes on the "rich" he is raising taxes on small business owners like me.

Here is a guy with a similar story to mine. He explains how it is much more eloquentlythan I do. Read it if you want to understand the real implications of raising taxes on the "rich".

The following was taken from [link]http://www.taemag.com/issues/articleID.18082/article_detail.asp[/link]