Essentially, Bush's claim is that un-doing his tax cuts for taxpayers with incomes over $200,000 (which Kerry has proposed) will kill small businesses.
Turns out, this is more fact-free propaganda. David Wessel provides some great counter-arguments in his WSJ CAPITAL column, "Undoing Tax Cuts Will Have Little Impact On Small Businesses" (subscription only).
Here are the numbers:
% OF ALL SMALL-
TOTAL INCOME BUSINESS RETURNS
Less than $75,000 65.4%
$75,000-$100,000 11.3
$100,000-$200,000 14.1
$200,000-$500,000 4.8
$500,000-$1 million 1.0
More than $1 million 0.6
Source: 2003 estimates, Tax Policy Center
So rolling back those tax cuts would affect less than 7% of "small business owners."
However, Wessel adds this:
Who are these "small-business owners"? Some of them are the heroic job-creating corner stores or start-ups that Mr. Bush's speeches describe. But the pay of anyone whose business is organized as a partnership -- doctors, lawyers, management consultants -- shows up on a tax return as small-business income. The successful ones end up in the top tax bracket where Mr. Kerry's tax plan would bite. Checks that members of corporate boards of directors receive, royalties that authors get, and consulting fees that professors charge show up as small-business income, too, and those folks are hardly the job creators of the modern economy.
So this is just another example of Bush bullsh*t.