Ask an Expert: OK, so who is the small-business candidate?

— -- Q: Will Obama really raise taxes on my business? Are McCain's

tax cuts just for the rich? Who is telling the truth here? — Larry

(Part 1 of 2)

A: While it is

difficult to separate the wheat from the chaff in presidential campaigns, this one is worse than most, with half-truth and flat-out untruths flying fast and furious.

It's

insulting, actually.

Here we are in the midst of two wars, and with an economy on the verge of a seeming meltdown, yet are stuck with two candidates yelping about personal

insults (mostly feigned), lipstick, and pigs?

Are we really going to fall for this stuff?

Look, there are all sorts of reasons to vote for or against a candidate,

and the effect on your business is only one, but that is the one we are concerned with here. But before I get to it, and as long as I am privileged enough to have this soapbox,

let me just say – let's demand better.

They want you to be distracted. Don't be. They want to play small ball. Insist on something bigger. They want to promise you the

stars and hope you won't notice that we cannot even afford the moon.

Personally, I refuse to reward any politician who insults my intelligence; who thinks that they can

get my vote by playing to the lowest common denominator. Tough times demand that we get more than business as usual.

OK, I feel better now.

So what will each

candidate do for your small business? Let's take a look at the major issues:

Taxes:

The McCain campaign continues to claim that Obama plans to raise taxes on the 26

million small businesses in this country. I am so tired of this one.

It's bunk.

They base this on the fact that the senator from Illinois is calling for a tax

increase as follows:

• On individuals who make more than $200,000

• On couples who make more than $250,000

The fact is, most small business owners do

not make this much money, so they would face no tax increase; in fact, most would probably be eligible for Obama's pork barrel giveaway, the $1,000 tax break for middle income

folks (well, at least I am a bipartisan insulter!) Obama also proposes to eliminate capital gains taxes for small business.

What about McCain? Does his tax plan help small

business? Mostly the answer is no, but then again, it does not hurt us, either.

McCain's tax plan, insofar as we are concerned, is twofold:

First, he wants to make

permanent the Bush tax cuts, which are set to expire in 2011. If they do expire, the top tax rate would go from 35% to 39.6%. Capital gains would go up 5%, to 20%. Estate taxes

would jump from 45% to 55%, and the estate exemption would go down from $2 million to $1 million (meaning, if your estate is worth more than $1 million, your heirs would owe the

tax).

Second, the Republican nominee wants to reduce the top corporate tax rate from 35% to 25%. He would also allow businesses to write off the full cost of capital

expenditures in the first year.

There is no doubt that the Bush tax cuts help upper income Americans, some of whom are small business owners, and in that regard help spur

economic growth. But is similarly true that, as with the proposed Obama tax raise, the vast majority of small business owners do not fall within the top tax bracket, and many

don't pay capital gains, so these changes would have little effect on us.

Conversely, many small business people do have estate in excess of $1 million (counting the value

of their businesses, homes, and investments), and so McCain's estate proposal would favor them (or, more accurately, their heirs).

Finally, most small business would be

completely unaffected by McCain's proposed reduction in the corporate tax rate, because 1) most small businesses are either S corporations, LLCs or sole proprietorships, so the

change would be inapplicable (it relates to C corporations), and 2) most don't make that much money.

Now, might McCain's cut in the corporate tax rate help spur the

economy, and thereby end up helping small business? You bet. (See next week's column.)

Overall, when comparing taxes at least, it is hard not to conclude that, as

historically has been true, Democrats tend to favor small business and Republicans tend to favor big business. This is borne out above. Sure there is some crossover, but mostly it

seems true.

Next week, we compare other issues of interest to small business, including health care and the economy.

Today's tip:For the solo entrepreneur,

making your website as personal and professional as possible is a must. One great way to do that is to virtually walk onto the screen when people come to your site.

iSpeakvideo.com helps you do that affordably. Steve says check it out.

Ask an Expert appears Mondays. You can e-mail Steve Strauss at: sstrauss@mrallbiz.com. And you can click here to see previous columns. Steven D. Strauss is a lawyer, author and speaker who specializes in small business and entrepreneurship. His latest book is The Small Business Bible. You can sign up for his free newsletter, "Small Business Success Secrets!" at his website —www.mrallbiz.com.