What ‘small business’ really means

While I’ve been traveling, much has happened; and much of it connects. So let’s start here, with the concept of “small business” beautifully explored by Keith Olbermann in a brilliant Countdown segment late last week. First the video, then a few comments:


This looks like original reporting, or at least original research. Big kudos to Olbermann and his staff.

The video is rich; I want to make just a few points:

  1. I’ve touched lightly on the concept of “replacement phrases” but not really explained myself. A replacement phrase is what you do to convert something said by Movement Conservatives (the “say anything to win” crowd) from something that makes no sense, to something that perfectly expresses what they mean.

    For example, if you take any statement containing the word “jobs” and substitute “profits”, the statement is wonderfully transparent. Test it and see; “job creation” means “profit creation” every time, for instance (h/t Noam Chomsky for that one).

    So let’s add to our library. New replacement phrase: When a Movement Conservative says “small businesses”, substitute “billionaires”.

    In the recent Pledge to Wipe Out America, for example, we have the statement “small business must have certainty that the rules won’t change every few months”. A quick substitution and you know exactly what they want. Don’t go changing the rules on billionaires, especially those pesky tax rules we’re just now discussing.

  2. 3% of “small businesses” control 50% of small business gross profit. That’s worth memorizing. For me this is the most stunning statistic of them all, and John Boehner, the Tan Who Would Be Speaker (hereinafter, “the Tan”) offered it up on MTP without beginning to think he was giving away multi-decade language fraud. For that, thank you sir.

    And I’m not just referring to Republicans in that multi-decade deception. Clinton did quite a lot for “small businesses” as well. I’ll bet they were ever so grateful.

  3. The technical definition of “small business” makes this usage perfectly clear. It’s worth memorizing as well. If you file taxes as part of an S corp, a partnership (LLC or law firm, for example), or a sole proprietorship, you’re a “small business” — period. This means you get Form K-1 or 1099, and/or file income on Schedule C and Schedule E. That’s it. In this definition, “small” has no relation to size (for a change), simply to type.

So let’s apply Boehner’s Rule to this world. The 3% that enjoy 50% of SB gross income are huge entities. They range from the Koch brothers to Bechtel ($31 billion in revenue), down to the KKR range (a paultry $445 million). A big chunk of the pie for a very small world. The rest of us, the other 97%, divvie up the remaining 50% (yep, I’m included here). This part of the pie is small, given the number of sharers. A struggling writer in Hollywood making $5000/year (a recent average of all WGAW writers) files a Schedule C. The woman who runs the restaurant near me files a Schedule C; I hope she survives the recession. Both Stephen King and Sarah D’Almeida (author of Death of a Musketeer, which few have read) file Schedule C or E for royalties. So yes, “small business” really does mean small business — when normal people say it. But when Movement Conservatives say it — and you’re going to hear it a lot between now and when Congress caves* in December — just keep the replacement phrase in mind. “Small business” means billionaires who bought tax breaks from both parties for their partnership and S corp earnings. They paid for a service, and they want it delivered, or at least not stopped.


*Yes, I think it’s now certain that Congress will cave in December. I’ll have more on that soon, but just ask yourself — if the rich-man fanboys (conservaDems & Repubs) are a risk to lay down even under hard pre-election populist scrutiny, how fast will they debase themselves when all the pressure is off?

I say if both houses don’t vote now, it’s a done deal. The only game left will be ID-ing the ones who pretend to stand straight in December when there’s no risk the slimy deal will fail — but would fold in a minute if the deal were at risk. That list will be worth having, for later.

Gaius Publius is a professional writer living on the West Coast of the United States.

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