Olbermann: GOP Uses 'Small Business' Tag To Help Save Huge Companies Billions (VIDEO)

The "small" businesses that Republican lawmakers say will suffer if the Bush-era tax cuts for the wealthy expire are not so small after all, MSNBC's "Countdown" reported Tuesday.

Some of these businesses, which include big names in engineering and finance, are "large" in terms of revenue, payroll and distribution, but "small" in terms of ownership, the report, by David Cay Johnston and Chris Hayes, has found.

According to the Republican tax logic, a small number of owners is the sole criterion for a "small business." Such businesses, which according to the Joint Committee on Taxation accounted for 94 percent of all U.S. businesses in 2007, include partnerships, sole proprietorships and S corporations, a designation that allows owners to report profits and losses on their personal tax return, rather than on the company's.

"'Small business' is a brand name," MSNBC's Keith Olbermann said.

The report found that businesses with billions of dollars in annual revenue fall under the small business category. Bechtel, a global engineering and construction company that is considered a "small business" under this logic, took in $31 billion last year. Ferrellgas, a propane company, earned $2 billion in revenue last year. McIlhenny, another "small business," which makes Tabasco sauce, made $250 million in revenue in 2007.

Other names include auditing firm PricewaterhouseCoopers and private equity firm Kohlberg Kravis Roberts. Also on the list are the collection of "small businesses" owned by the billionaire Koch Brothers, who this year tied for fifth on the Forbes list of wealthiest Americans, and who were profiled last month by Jane Mayer in The New Yorker.

Bloomberg first reported this unusual tax logic on Monday. The Republican "small business" designation, the report said, would apply even to individuals with no employees at all. It could include actors, athletes and authors -- even President Obama.

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Comments

[Tiggy]

08:46 AM on 09/27/2010

We are a small family owned business trying to grow. We received no financial backing and used a portion of our retirement to start our business, which by the way is 100% American Made. We attended a meeting Friday designed to discuss what is available to us from this new business legislation... For a startup business:
1. Loan amount of 5k - 35k payable in 6 - 72 months
2. Must have business prospectus and plan done by a professional (1k)
3. Must complete 14 pages of application
4. Must be able to collateralize 100% of loan
5. Must pay all closing cost
6. Must pay a fee of $100.00 per year for the loan
7. Must provide 3 years of personal tax returns
8. Must personally guarantee a loan for a business
9. Must pay 8 to 13% interest with an average of 10 being the going rate
10. All lending is based on a first come first serve basis with hiring US workers a mild consideration
11. Any tax relief granted is gobbled up by the bank interest!
12. The only true beneficiary? THE BANKS
Yet, we bailed out three credit unions and guaranteed them against loss to the tune of 50 billion over the weekend! We are really trying to create jobs in this country!

[rshrink]

11:53 AM on 09/25/2010

Boy, I wouldn't mind having a little business like that. Even if the tax cuts go bye bye.

[Americaisscrewed]

10:43 AM on 09/25/2010

How mant folks watched Keith last night? 4 or 5??

[rshrink]

11:55 AM on 09/25/2010

4 or 5 million? Yes, that would be about right. And that would just be the elite intelligent ones.

[dad1110]

09:43 PM on 10/02/2010

In your dreams friend. I do watch Oberman when I need a good laugh though. If you see him, would you give him a message for me. GW Bush is no longer in office and this love/hate relationship he has with Sarah Palin is really getting old. This officially the Obama economy since the recession has now been declared over some 9 months ago.

[ntrpreneur]

03:55 PM on 09/24/2010

Stop lying. Here are the facts about what "small businesses" are and what they mean to the economy. Here's also the link: http://www.sba.gov/advo/stats/sbfaq.pdf
The facts: Small businesses with under 500 employees provide at least half of all jobs in the private sector and have created 65% of all NEW jobs. Stop taxing them to death.

What is a small business?
The Office of Advocacy defines a small business as an independent business having fewer than 500 employees.
How important are small businesses to the U.S. economy?
Small firms:
• Represent 99.7 percent of all employer firms.
• Employ half of all private sector employees.
• Pay 44 percent of total U.S. private payroll.
• Generated 65 percent of net new jobs over the past 17 years.
• Create more than half of the nonfarm private GDP.
• Hire 43 percent of high tech workers (scientists, engineers, computer programmers, and others).
• Are 52 percent home-based and 2 percent franchises.
• Made up 97.5 percent of all identified exporters and produced 31 percent of export value in FY 2008.
• Produce 13 times more patents per employee than large patenting firms.
Source: U.S. Dept. of Commerce, Census Bureau and Intl. Trade Admin.; Advocacy-funded research by Kathryn Kobe, 2007 (www.sba.gov/advo/research/rs299tot.pdf) and CHI Research, 2003 (www.sba.gov/advo/research/rs225tot.pdf); U.S. Dept. of Labor, Bureau of Labor Statistics.

[rshrink]

12:06 PM on 09/25/2010

The above is what the department of labor calls small business.

If you had read the article, it says;

"Such businesses, which according to the Joint Committee on Taxation accounted for 94 percent of all U.S. businesses in 2007, include partnerships, sole proprietorships and S corporations, a designation that allows owners to report profits and losses on their personal tax return, rather than on the company's."

This has to do with taxes, not about labor statistics.

Keep searching. Maybe you will find something relevant.

[PlayTOE]

11:16 PM on 09/25/2010

What is a small business?
That depends on if you go by the U.S. Dept. of Labor, The Office of Advocacy
or
If you go by the Republican spin doctors who are redefining a lot of business as small so they look better when trashing the Obama policy to tax the ultra rich.

[BocaMom]

01:51 PM on 09/24/2010

What a clown. Just another lap dog for the White House and their ineffective policies.

[rshrink]

12:07 PM on 09/25/2010

And yet he makes tons more money than you.

[Klarsonent]

01:02 PM on 09/24/2010

Why are we surprised? The GOP continually stretches and twists the truth, knowing that most of their followers do not READ and comprehend the facts. They blindly follow the talking heads at Fox News, and regularly listen to radio hosts such as Rush Limbaugh.

[ntrpreneur]

04:48 PM on 09/24/2010

What about the talking empty heads at MSNBC, NBC, and CNN that the "progressives" (i.e. recessives) listen to? Talk about lapdogs to empty rhetoric! LOL

[loanshark]

10:51 AM on 09/25/2010

#1

[Klarsonent]

11:42 AM on 09/25/2010

I don't watch the networks you've listed. I watch Bloomberg Business news, and some Fox Business news. I also read a lot of the articles on Market Watch.

All I'm trying to point out is that most people only listen or read ONE side of the issues. You really need to read and absorb BOTH sides in order to make intelligent decisions at the polls.

[dad1110]

09:47 PM on 10/02/2010

and of course the Dems with Cnn, NBC, CBS, ABC, HP, move-on.org etc, have NEVER lied about anything political. Thank God for another view other than the progressive party line.

[Greenstooge]

04:48 PM on 11/02/2010

Please provide instances.....Such an informative post should be backed up by facts.

[itolduso]

12:54 PM on 09/24/2010

1/3 of all banks are S-corps, along with some of our wealthiest Congressmen, real-estate investors, and money-management firms........guess we just gave them another bailout.....and new incentives to create the next 'bubble'.

[feliznavidad]

12:01 PM on 09/24/2010

The republicraps are liars. Period. They know very well that when they say "small" business that the general public thinks of the mechanic or barber down the street. I own a small business and I am trying to put people straight. My business needs more customers with flow; if we get that, I'm not going to groan about paying income tax. The income tax is only on our profits. The big corporations continue to hide behind the skirts of so-called "small" business -- to avoid paying well-paying, granting health benefits, and paying taxes. These practices -- plus unfair competition -- are things that negatively impact my small business. If you want to save real small businesses, support your local mom and pops, and hold the big corporations accountable. Let them pay more taxes. Thanks for calling them out on this, Keith. JOB WELL DONE!!!!!

[gplamb]

11:03 AM on 09/24/2010

I don't want to complain without offering a solution.

"Small Business" is not just a label as it has significant economic ramifications when it comes to awarding contracts, set asides, etc for SBA purposes. The large entities that could exploit these loop holes are getting unjustly enriched at the expense of real small businesses.

Corporate structure should not determine size. It should be a combination of total revenues and size at determined by number of employees (full and part time -full time equivalents). I don't know what the levels should be. Perhaps:

Revenues < $50,000
Employees (FTE) < 500

Certainly, a company like Bechtel with 44,000 employees as of 2009 working on projects in nearly 50 countries with $31.4 billion in revenue would not count.

[Robert Cantor]

12:52 PM on 09/24/2010

$50,000,000? ($50M)?

[gplamb]

02:51 PM on 09/24/2010

let's add a few 0's - thanks for the catch.
$50M ($50,000,000)

[exmate]

06:22 AM on 09/24/2010

What's wrong with making a lot of money by running profitable companies?

If those companies have acted as some financial institutions have behaved lately.

1..The same thing that is wrong with a crime syndicate raking in huge profits from their operations which result in ruining the lives of thousands of people. Yes, they work hard at it. They have demonstrated imagination, organizational skills in piecing off authorities and managing logistics. They are enterprising, intelligent and efficient .

2. They deserve the fruits of their success. Right ? WRONG! Unike more worthy endeavor, their activities do not contibute to society in any positive way in terms of goods and services.

[ntrpreneur]

04:52 PM on 09/24/2010

Are you saying that small businesses are the same as criminal syndicates and that by hiring people and creating jobs the are also "ruining the lives of thousands of people" and that creating jobs and income for tens of millions of people is not either a worthy endeavor or a positive contribution to society? What progressive planet are you from?

[exmate]

10:35 PM on 09/24/2010

Ken Lay (GW BUsh's biggest and earliest supporter) ruined the lives of thousands of his employees

Like Enron, you have what appear to be top corporate bigwigs making out with millions. Gary Winnick made off with something in excess of 700 million dollars alone.

The list goes on . These are people who could have had lives we could only dream of without tyhat thievery.

DON'T PUT WORDS IN MY MOUTH. I AM NOT SAYING THAT ALL SMALL OR LARGE BUSINESS ARE THE SAME AS CRIME SYNDICATES.

[Kache]

03:32 PM on 09/25/2010

Adam Smith thought that any corporation that extracted wealth from society for conspicuous consumption rather than re-investment was indeed an unhealthy syndicate that the state needed to disband.

[Greenstooge]

04:53 PM on 11/02/2010

I love how republicans feel that the middle class should exist without entitlement. When there is a war, this country is only represented only by the lower and middle class but, god forbid we should want to see a doctor without having to take out a 2nd mortgage.

[BlueSkyPilot]

06:13 AM on 09/24/2010

I am a "Small Business".
I made $10 Billion last year.
I paid No taxes in the US.
With the "Plague on America" I will get a $2 Billion credit.
Thank you for voting for the Republicans!

[mamacat]

05:45 AM on 09/24/2010

GOP Logic - isn't that an oxymoron? When was the last time they told the truth about anything, or even made sense about anything? Anything at all?

[GoodRead]

12:32 AM on 09/24/2010

Are S Corporations (small business by the Republican definition), cheating the US Government out of $300 billion a year? The IRS seeks to find out

(Verbatim from Wikipedia, capitalization added for emphasis)

In 2005, the IRS launched a study to assess the reporting compliance of S corporations. The study began in late 2005 and examined 5,000 randomly selected S corporation returns from tax years 2003 and 2004. The IRS intends to use the results to measure compliance in recording of income, deductions and credits from S corporations, and to formulate future audit criteria to better target likely non-compliant returns. This is part of a larger IRS effort TO IMPROVE TAX COMPLIANCE AND REDUCE THE ESTIMATED $300 BILLION GAP IN GROSS REPORTED FIGURES EACH YEAR. A large portion of that gap is thought to come from small businesses, and particularly S corporations, which are now the most common corporate entity, numbering over 3 million in 2002, up from about 750,000 in 1985.

[pcantidote]

09:46 PM on 09/23/2010

The SBA defines small businesses as those that employ less than 500. The SBA states that small businesses employ half of all private sector employees. Most of these small businesses are S-corps and partnerships. I guess Keith thinks these companies should be punished because there are a few big S-corps and partnerships. No Republican has ever stated that ALL S-corps and partnerships are small businesses. Keith, FAIL.

[Kache]

10:57 PM on 09/23/2010

Raising the tax rate on $250K will not effect a single business. The owner of the business might well damage his business but the tax would not.

Suppose you have a "small business" and have a million left over at the end of the year. If you stuff all one million in your pocket for buuz and hoes, you'll pay the increased rate. But, if you stuff "only" $249K in your pocket and INVEST the other $751K in your business you'll not pay on the $751K and pay the same rate on the $249K that a $50K earner pays. It all depends on you. I realize that $751K buys some mighty fine buuz and hoes, but is it that good? If it is, pay the tax and quit whining.

[GoodRead]

01:51 AM on 09/24/2010

The same facts stated by Oberman, could have been read off by Rush, Sarah, Christine, or McConnell. My former $57 million gross revenue employer converted to a S after 26 years as an S for the sole purpose of lowering his federal income taxes. I helped him do it. He got more than $300,000 back.

The point Oberman was making, which I think you may have missed, is that small businesses, as used ny the Republicans, doesn't mean the the businesses are small, it just just means that many of them are legally structured in such a way as to pay less tax.

Being an S corp, or changing to one from a C, is perfectly legal even when done for the explicit purpose of avoiding taxes. I did not come away from watching Oberman's piece that he had a problem with that either. I don't.

What I do have a problem with though, is multi-million and multi-billion dollar corporations being referred to as "small businesses" because they are S corps or partnerships and taking a double dip at the individual taxpayer's expense. I think that is what Oberman was getting at, in addition that small businesses should be honestly used, when used in public.

[pcantidote]

08:30 AM on 09/24/2010

Show me just one piece of evidence where a Republican has stated that the sole criteria for determining what constitutes a small business is how the business files its taxes. This was the foundation of Keith's story. It fails.

[Renee27]

08:47 PM on 09/23/2010

Thank you Keith. Finally someone is exposing the Republican "small business" scam.

[GoodRead]

02:09 AM on 09/24/2010

Ditto. I also thought that when the Politicos used the term "small business", they were talking about the guy that services my electric lawn mower, not the company that built the nuclear power plant where the electricty come from!

From Wikipedia:
Riley P. Bechtel is the CEO of Bechtel. With a net worth of $3.2 billion, he is the 50th richest person in the U.S. and the 127th richest in the world.

Bechtel IS NOT a "small" business by any stretch of the imagination.