Tuesday, September 21, 2010

What is their definition of a "small business"?

When Republicans are challenged about their desire to give massive tax cuts to the rich, they consistently try to convert it into a conversation about "small business". The problem is that their definition of "small business" is inevitably broad.

Take the case of "career politician" U.S. Senator Mitch McConnell (R-KY). In recent comments he claimed that half of "small businesses" in the country would see a tax increase if George W. Bush's tax cuts for the rich were not renewed. Bloomberg looked at McConnell's rhetoric and made some of the the following observations.

McConnell’s numbers add up only if you consider people like billionaire investor George Soros, most movie stars and Obama himself small-business owners, tax experts say.

That’s because the lawmaker is basing his figure on a broad definition of the term that experts say includes authors, actors and athletes who employ few if any workers. It also encompasses businesses that many people wouldn’t consider small, such as Soros’s hedge-fund firm and major law partnerships.

I don't think that there is an exact textbook definition of precisely what constitutes a "small business". But I am pretty sure, that it shouldn't include a billionaire, a partner of a major law firm, a movie star and a professional athelete. The next time a Republican tells you that "small businesses" will be hurt by some policy that they don't like, remember to get a detailed definition.

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