Small businesses have reason to be concerned about plans the Democrats have for taxation should they win the White House. Rep.Charlie Rangel (D-NY), Chairman of the taxwriting Ways and Means Committee has proposed a significant revision to the tax code. While there is a reduction of the corporate tax rate and the elimination of the much-hated Alternative Minimum Tax, there is a nasty surprise for small business owners. Any business operating as a Subchapter S corporation or an LLC faces a tax increase of 4% on GROSS RECEIPTS, not taxable income. That's because owners of those businesses most often are taxed at the individual rate, not the corporate rate.

See a good article from the small business perspective from the Small Business & Entrepreneurship Council.

see the MarketWatch article

full text of H.R. 3970