Obama Among `Small Businesses' Bearing Share of Tax Hike

Bloomberg:

Senate Republican leader Mitch McConnell says President Barack Obama wants to subject half of all small-business income to a tax increase, a move that he says would strike a blow at the U.S. job-creation engine.

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.

“Every student who is a part-time Web designer, partner in a law firm with a billion dollars of revenue and investor in a hedge fund gets lumped together in the data, along with real small businesses,” said Edward Kleinbard, a former staff director of the congressional Joint Committee on Taxation and now a law professor at the University of Southern California. “We are being over-inclusive in our use of small-business income.”