I don't know where you're getting your information from, but if a sole propieter is paying taxes on anything other than after expense profit then he better get an accountant, because it doesn't work that way. The tax code also allows operating losses to be carried over, so if he lost money last year he still doesn't owe tax.<quoted text>
There's nothing more laughable than a know-it-all that doesn't know it all.
The business I work for is a DBA (Doing Business As...), better known as a sole proprietorship. The owner is taxed as an individual (he is the business), and taxes are based on the business entity income, not profit, minus all kinds of deductions, many that Incs and LLC's don't get. Sole proprietors are also personally liable for all debts and expenses incurred by their business, unlike Incs or LLC's.
Again, that's why letting the over $250,000 tax cut sunset in 2011 is going to hurt many small businesses. It's going to increase my employers tax rate by 4.6%, though his income (profit) is nowhere near 250,000.
Business entity income and profit are the same thing. If he's making over 250k a year in net profit than he's either not paying his employees enough or over charging his customers. Either way he would certainly be the last person who needs help from the government at this time.