“That's 750,000 small businesses in America, the most productive, the ones that are the most successful, getting hit by a tax increase on top of everything else that's happened to them in the last 18 months of this administration,” said Senate Minority Leader
Mitch McConnell (R-KY). But
McConnellÂ’s number is only accurate if you take an incredibly expansive view of what constitutes a small business.
Included in that 750,000 is the Bechtel Corporation, the largest engineering firm in the country. It is the fifth-largest privately owned company in the United States, posting gross revenue in 2008 of $31.4 billion. The number also includes the
Wall Street buyout firm Kohlberg, Kravis and Roberts, which has more than $54 billion in assets and 14 offices around the globe. The auditing firm
PricewaterhouseCoopers, which has operations in more than 150 countries,
fits the bill as well.
The reason conservatives cite these companies as “small businesses” is that they are “pass-through” entities, meaning that
instead of paying the corporate income tax, they
“pass-through” their earnings to individual owners, who claim the profits on their personal income tax returns. There are
legitimate reasons for incorporating in this fashion, but
it is also a way for large companies to avoid taxes."