10/30/2008 04:56 pm ET Updated May 25, 2011

The True Small Business Candidate

Who is really the best candidate for small business? The answer may surprise you.

Pardon the pun, but this determination is no small thing and the candidates know it:

* 99 percent of all business in this country is small business (the vast majority have 10 employees or less)
* Half of all employees work for those businesses
* 60 percent of all job creation stems from small business

Yep, small business is big business in this country. So it should be no surprise that both Barack Obama and John McCain each claim the mantle of being the candidate of the actual and would-be Joe the Plumbers out there.

I decided to do a little experiment and find out once and for all who was right.

I had a hunch how the experiment would turn out, but I wasn't positive. This gut feeling came from my decade of experience as the small business columnist for, from being the author of The Small Business Bible, and also as an entrepreneur myself.

The challenge was that, because people look at the candidates through their own political lens, determining which candidate is truly be better for small business is necessarily a skewed affair: Democrats see the word "small" and figure Obama is the guy. Republicans see the word "business" and smile.

So I decided to become an impartial observer to the extent possible, look at their proposed policies, and come to some (hopefully) non-partisan conclusions. Although I had no idea what I would find when I began, after much careful consideration and analysis of positions, policies, and proposals, the clear winner was . . . Barack Obama.

On almost every issue that is of importance to entrepreneurs and other small business folk, the inescapable conclusion is that Obama's is the better small business candidate.


John McCain has long been saying that Obama plans to raise taxes on small business, yet as we all also know by now, Obama is promising to raise taxes on only those people making $250,000 a year or more.

But McCain is wrong, plain and simple. The fact is, most small businesses do not make nearly that much money. Indeed, according to the U.S. Census 2007 Report of Income, the vast majority of small businesses net much, much less than that.

That rings true, does it not?

As such, the truth is that, rather than a tax increase, most small business people would likely be eligible for Obama's $1,000 tax cut.

Now it is true that McCain makes much of the fact that he is proposing to drop the corporate tax rate from 35 percent to 25 percent. The only problem is that this would affect only a fraction of small businesses since most are sole proprietors, and of those that are incorporated, most are not subject to any corporate tax anyway since they choose to have their taxes flow through to their individual returns (they are S corporations and not C corporations.)

While cutting the corporate tax rate may be a valid policy proposal, let's just call it what it is: A proposal that favors big business, not small business.


The same conclusion held true no matter what issue I considered: Whether it was the Small Business Administration (Obama wants to restore funding and loans cut by the Bush administration, McCain is silent on the matter), health care (McCain's $5,000 tax credit would seem to do little to bring costs down, and that is the most important thing to us), the overall economy (it is no time to hand it over to someone who is "fundamentally a deregulator" and who admits it is not his strong suit), or what have you, the FACT is that Obama is the stronger small business candidate.

This really should come as no surprise; Republicans are traditionally the party of big business and the Democrats are the party of small business. What is surprising is that Joe the Plumber never got who is really on his side.