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Republicans Advocate for Small Business Begs the Question? What is Considered a Small Business?
During a broadcast of the show “Countdown,” host Keith Olbermann unmasked the folly of the Republican mantra of the need to extend the Bush tax cuts, which were for the wealthy, in order to protect small business in America.
The broadcast unveiled the fact that the “small business” the Republicans in Congress are advocating for include the richest individuals and corporations in America; including the Koch Brothers, Bechtel Construction and The Tribune Corporation.
You decide if the Republican argument for extending the Bush tax cuts should prevail. Following is a transcript of the Countdown broadcast.
Good evening from New York. With the final session of Congress before
Election Day coming down to the wire now, Democrats are still torn between whether to force Republicans to vote now in defense of tax cuts for the rich or to duck a vote on extending the Bush tax cuts and let Republicans campaign against them for letting all taxes rise. If it seems like a no-brainer, our fifth story tonight should remove all doubt. A “Countdown” special report, the reality behind the Republican argument made by House Republican leader John Boehner and others that tax cuts for the rich are simply tax cuts for small businesses whose owners report their business earnings on their individual personal income tax returns. House Democrats have pushed back that some of those supposedly small businesses are actually big businesses, and after the White House identified the right-wing billionaire Koch brothers as being among those ranks, Bill Kristol’s right-wing magazine, “The Weekly Standard,” fired back, suggesting the White House had improperly looked at the Koch brother’s tax return. In fact, their tax status was already public information. but as “Countdown,” with the help of David K. Johnson, who joins us presently, the Koch brothers are just the tip of a half-trillion dollar iceberg. A variety of sources including court documents confirm that when Republicans talk about the small businesses they’re trying to help with their tax cut, they’re actually talking about some of the biggest companies in the world and some of the richest people in this country, Mr. Boehner, admitting this summer that his tax cuts only benefit 3% of so-called small businesses, so how small can that top 3% be when it accounts for half of all small business income?
[Question] Only 3% of those small businesspeople, you keep talking about all the small businesspeople that are going to get taxed, only 3% would be affected by that, do you quarrel with that figure? Is that a right figure or a wrong figure?
[Boehner’s response] “It may be 3%, but it’s half of small business income, because, obviously, the top 3% have half of the gross income for those companies that we would term small businesses.”
So how do they decide which companies they would term “ small businesses”? H&R Block told Politico it has $1.5 million small clients, but extending the tax cuts would benefit fewer than 1% of them, fewer than 750,000 people, one quarter of 1% of the country, would be affected by the top rate, so how small can this top 3% of small businesses be if they make half the small business money?
And let’s remember the context back then.
Reporter: Dave Kamp knows, he’s the ranking Republican member on the House Ways and Means Committee. To him, the definition of small business is a footnote, literally. “According to the Joint Committee on Taxation, 94% of all U.S. businesses in 2007 were “S” Corporations, partnerships, or sole proprietorships, pass-through business types commonly used by small businesses.” They call them pass-through companies because they file no taxes, passing through profits to the owners who report them on their individual tax returns instead. In short, they are considered small, not because they have a small payroll, but because they have a small number of owners, it’s not the income that’s small, it’s not the number of employees that’s small, it’s just the total number of owners.
That’s small, in the case of “S” Corporations, up to 100 owners, when politicians talk about small businesses, they are including any company that pays taxes as a pass-through. House Democrats last week identified three limited partnerships that
file as pass-throughs. A pipeline company called Enterprise, the Wall Street firm, Kohlberg, Kravitz, and Waters, and PriceWaterhouseCoopers. Their own website lists partnership after partnership after partnership that make up a small business empire of 70,000 employees. According to the “Washington Post,” more than 1 million people who reported at least $200,000 in income in 2008 were partnerships and “S” Corps. The richer you are, the more likely you are to call yourself a small business. That way. 89% of Americans who make more than $10 million a year filed as a partnership or an “S” Corp. in 2008, more than 500,000 of these supposed small businesses had more than $1 million in assets, in 2005, almost 20,000 of them had annual receipts of more than $50 million, but if you want to know which companies these are, you are out of luck, because individual tax filings are not public record. Still, some have revealed themselves. The “S” Corp. Association lobbying group is chaired by an executive of the Hillman Company, a small business founded by a billionaire, the “A” Copper Group president is from Venn Strategies, a small business whose chief operating officer is a former special assistant to President Bush, whose president used to work-for Senate Leader Reid. Directors of the “S” Corp. group come from Ferrellgas, which provides propane and propane accessories, with a small business touch to 1 million customers. A small business, Coorstek, North America’s largest maker of technical ceramics, a small business founded by Adolf Coors. A small business, the Dead River Company, a small business with commercial real estate valued at $300 million, a small business, and a small business called Maccel Haney, selling their tabasco sauce out of their kitchen to 160 countries, a small business. The Boston Globe revealed in 2007 that Fidelity Investments was becoming an “S” Corp., a move that saved this small business hundreds of millions of dollars, similar to how ascrappy little newspaper call “The Tribune,” as in the “Chicago
Tribune,” made an extra $1.9 billion by converting to “S” Corp. status in 2008. As tax reporter David K. Johnston figured out, other companies get revealed as “S” Corps. when their filings become evidence in tax trials, that’s how he identified one of the biggest small businesses in the world — Bechtel. A small business that builds airports, seaports, railroads, oil refineries, nuclear refineries, but back when it was all just Bechtel, they built the Hoover Dam. Today, the world’s number one engineering and construction firm, a small business. Companies aside, who are the actual people who would benefit from the Republican tax cut for the richest small businesses? Him, for one (Texas billionaire J. Howard Marshall, deceased husband of Anna Nicole Smith). Bloomberg news reports the president and other big authors and actors and celebrities, even hedge fund managers, file as “S” Corps. to save on taxes, nor is Mr. Obama the only famous “S” Corp. owner, Thanks to court documents reviewed by “Countdown,” we know one of Texas’ two richest men in the 1990s became an “S” Corp. back in 1991. Senator John McCain knows about “S” Corps. Mrs. John McCain filed as an “S” Corp. back in 2006. A small business owner who owns a massive beer distributorship and reported income of more than $6 million, and then there’s small business man Philip Anshultz. A small businessman who gave $30,000 to the Senate Republican campaign committee last year, and $15,000 to the House, on top of his family’s more than $500 million to Republicans over all. He owns small railroads, small oil companies, sports stadiums, small arenas, a small national movie theater chain, a small half of major league soccer, the L.A. Kings, the L.A. Lakers. His small business entertainment company likes to clean out the old garage now and again to put on small shows by Bette Midler and Cher. Mr. Anshultz even owns small newspapers, including “The Weekly Standard.” “Countdown” has even identified one’ S” Corp. owner whose reclusive chairman actually works out of these very NBC headquarters in New York—me, Keith Olbermann.
• Bechtel Construction & Engineering
• The Borta Globe
• The Tribune Company
• Mrs. John McCain Bar Distributers
• Owner of the L.A. Lakers & L.A. Kings to name a few