Fact check: Plumber Joe's taxes

Plumber Joe Wurzelbacher heard his name invoked more than two dozen times in the final presidential debate.

McCain has entrepreneurs spooked about tax hikes, but fewer than 2% of small business owners would pay more under Obama's plan.

Plumber Joe Wurzelbacher heard his name invoked more than two dozen times in the final presidential debate. Obama and McCain on taxes

Almost half of small-business owners say they're worse off than they were three years ago, according to a recent Zogby poll.

As banks clamp down on lending, companies are struggling to survive. Entrepreneurs around the U.S. wrote in to tell us how they're weathering the turmoil.

In speech after speech, presidential candidate John McCain hammers on the claim that his rival Barack Obama will raise taxes on many small businesses.

At the debate on Wednesday night, McCain said, "The small businesses that we're talking about would receive an increase in their taxes right now."

More typically he has said: "What [Obama] hasn't told you is that he would tax half of the income of small businesses in America," a line used in La Crosse, Wisc., last week.

Should small business owners fear for their wallets if Obama is elected? Not the vast majority, business and tax experts say.

To make its claim, according to a McCain spokesman, the campaign counts as a small-business owner any taxpayer who files a Schedule C, E or F - the forms used to report gains and losses from business ventures and farms.

Using that definition and citing IRS data, the campaign notes that "56.8% of total small business income is earned by businesses in the top two rates, which Barack Obama has pledged to raise."

It's true that Obama has proposed raising taxes on the top two income rates.

But there are three main problems with McCain's charge.

What is a small business?

First, it relies on a broad definition of what counts as a small business, including everyone who files a Schedule C, E and F.

But most people who file those forms don't run a business for a living: Those forms are also used to report income from freelance and consulting work, real-estate rentals, and most other non-salary sources.

For example, McCain and Obama both file Schedule C returns, thanks to their book royalties - but they hardly should be considered small business owners.

Plumber Joe's taxes