Obama says Trump is a small business under Romney plan
The government defines small business as having under 500 workers
President Barack Obama invoked Donald Trump’s name during Wednesday’s presidential debate, claiming that GOP presidential candidate Mitt Romney would consider the mogul’s empire a small business.
“Under Governor Romney’s definition, there are a whole bunch of millionaires and billionaires who are small businesses,” President Obama said. “Donald Trump is a small business. Now, I know Donald Trump doesn’t like to think of himself as small anything – but that’s how you define small businesses if you’re getting business income.”
While there is no universally accepted definition of a small business, the federal government defines it as any business that employs fewer than 500 people.
The Trump Organization employs 22,000 people. But Trump also runs a number of other companies that employ fewer than 500, meaning that – under the federal government’s definition – he qualifies as a small business.
According to the U.S. Small Business Administration, which uses the 500-worker maximum in its definition, such firms employ half of all private-sector workers and pay 44% of the total U.S. private payroll. In 2009, there were 27.5 million businesses in the nation, 99.7% of which were small firms.
IRS data on the highest-income people in the country underscores that small business does not necessarily mean small profits. Of the top 400 people — who got $19.8 billion in S corporation and partnership net income in 2009 — 237 count as small businesses.
An analysis by the Urban Institute-Brookings Tax Policy Center finds that extending tax cuts for people who make more than $250,000 per year ($200,000 for single filers) would disproportionately help the richest taxpayers: 82% of the cut would go to people with more than $1 million in adjusted gross income, who would get an average tax cut of $164,000 apiece.
Romney’s plan does not single out small businesses for special treatment. His plan attempts to lower taxes on all businesses – big or small.
Conclusion: While Romney’s plan does not define who is or is not a small business, some of Donald Trump’s companies would qualify as a small business because they have fewer than 500 employees.
CNNMoney’s Small Business Reporter Jose Pagliery and CNN’s Diane Laposta contributed to this report