NBC News and msnbc.com
updated 9/22/2010 9:51:10 PM ET 2010-09-23T01:51:10

A number of companies with multi-billion dollar revenues have been registered as small businesses for tax purposes, according to a report.

  1. Other political news of note
    1. Animated Boehner: 'There's nothing complex about the Keystone Pipeline!'

      House Speaker John Boehner became animated Tuesday over the proposed Keystone Pipeline, castigating the Obama administration for not having approved the project yet.

    2. Budget deficits shrinking but set to grow after 2015
    3. Senate readies another volley on unemployment aid
    4. Obama faces Syria standstill
    5. Fluke files to run in California

Among them were the "biggest companies in the world and the richest people in this country" Keith Olbermann said in a special report on his msnbc cable show Wednesday night titled, "Small Business in Name Only."

The term "small business" was an "utter misnomer," he claimed.

Because IRS tax returns are not public record, the names of companies were ascertained from public documents such as court records or the companies' postings:

Among the examples given on "Countdown with Keith Olbermann" were:

    1. Animated Boehner: 'There's nothing complex about the Keystone Pipeline!'

      House Speaker John Boehner became animated Tuesday over the proposed Keystone Pipeline, castigating the Obama administration for not having approved the project yet. Full story

    2. Budget deficits shrinking but set to grow after 2015
    3. Senate readies another volley on unemployment aid
    4. Obama faces Syria standstill
    5. Fluke files to run in California
  • Enterprise Products Partners, L.P., a pipeline company with 2009 revenues of $25 billion.
  • Kohlberg Kravis Roberts & Co., a Wall Street firm with $445 million in revenue in 2009.
  • Price Waterhouse Coopers, an accounting firm with $26 billion in revenue in 2009.
  • Koch Industries, a conglomerate of partnerships with 70,000 employees.
  • The Hillman Company, an investment founded by billionaire philanthropist/industrialist Henry Hillman.
  • Venn Strategies, Inc., whose chief operating officer is Brian Reardon, a former special assistant to former President George W. Bush.
  • Ferrellgas, a propane and propane accessories business, with $2 billion in revenues in 2009 and 1 million customers.
  • CoorsTek, a ceramics manufacturer founded by Adolph Coors, with 2009 revenue of $549 million.
  • Dead River Co., with $500 million in revenue and 1,200 employees.
  • McIlhenney Co., the Tabasco maker, with $250 million in revenue in 2007.

The revelation comes as Democrats and Republicans debate tax cuts and the economy.

President Barack Obama and most of his fellow Democrats want tax cuts enacted under former President George W. Bush to be extended only for the first $200,000 of a person's income or $250,000 for a family, saying the country cannot afford the cuts for higher earners.

Republicans want the lower rates renewed for all Americans, regardless of income, and say that losing the cuts would hurt small businesses and job creation just as the economy is recovering from its worst recession since the 1930s.

On CBS' "Face The Nation" on Sept. 12, Rep. John Boehner, R-Ohio, conceded that a nonpartisan Joint Committee on Taxation found that 3 percent of small-business people would be impacted if Bush tax cuts for the rich would expire.

Story: Tax, spending cuts top GOP 'Pledge to America'

"Well, it may be 3 percent, but it's half of small business income," House minority leader told Bob Schieffer. "Because, obviously, the top 3 percent have half of the gross income for those companies that we would term small businesses. And this is why you don't want to punish these people at a time when you have a weak economy."

Fewer than 750,000 people, less than 0.25 percent of the country, would be affected by the top rate, according to Joint Committee on Taxation figures quoted by Olbermann.

Video: Who benefits from small businesses? (on this page)

Owners of such businesses would benefit from continuation of Bush era tax cuts due to expire at the end of this year.

Rather than paying corporate taxes, the firms operate as S Corporations, sole proprietorships or partnerships, including limited liability companies that put LLC instead of Inc. at the end of their names.

All are considered pass-through structures, in which company profits are passed directly to individual owners, who then pay taxes.

Traditional corporations pay taxes on profits and pass along dividends to individuals, who pay taxes on the dividends.

Olbermann explained the rules for classification as a small business.

“It’s not the income that’s small, it’s not the number of employees that’s small, it’s just the total number of owners that’s small,” Olbermann said.

In the case of S corporations, the total number of owners can be 100, he said.

© 2013 msnbc.com  Reprints

Video: Countdown Special Report: Small in name only

  1. Closed captioning of: Countdown Special Report: Small in name only

    >>> good evening from new york. with the final session of congress before election day coming down to the wire now, democrats are still torn between whether to force republicans to vote now in defense of tax cuts for the rich or to duck a vote on extending the bush tax cuts and let republicans campaign against them for letting all taxes rise. if it seems like a no-brainer, our fifth story tonight should remove all doubt. a "countdown" special report , the reality behind the republican argument made by house republican leader john boehner and others that tax cuts for the rich are simply tax cuts for small businesses whose owners report their business earnings on their individual personal income tax returns. house democrats have pushed back that some of those supposedly small businesses are actually big businesses, and after the white house identified the right-wing billionaire coke brothers as being among those ranks, bill kristol 's right-wing magazine, "the weekly standard ," fired back, suggesting the white house had improperly looked at the coke brother's tax return . in fact, their tax status was already public information. but as "countdown" skofred with the help of david k. johnson, who joins us presently, the koch brothers are just the tip of a half-trillion dollar iceberg. a variety of sources including court documents confirm that when republicans talk about the small businesses they're trying to help with their tax cut , they're actually talking about some of the biggest companies in the world and some of the richest people in this country. mr. boehner admitting this summer that his tax cuts only benefit 3% of so-called small businesses . so how small can that top 3% be when it accounts for half of all small business income?

    >> only 3% of those small businesspeople, you keep talking about all the small businesspeople that are going to get taxed. only 3% would be affected by that. do you quarrel with that figure? is that a right figure or a wrong figure?

    >> it may be 3%, but it's half of small business income, because, obviously, the top 3% have half of the gross income for those companies that we would term small businesses .

    >> so how do they decide which companies they would term " small businesses "? h&r block told politico it has $1.5 million small clients. but extending the tax cuts would benefit fewer than 1% of them. fewer than 750,000 people, one quarter of 1% of the country, would be affected by the top rate. so how small can this top 3% of small businesses be if they make half the small business money?

    >> and let's remember the context back then.

    >> reporter: dave kamp knows. he's the ranking republican member on the house ways and means committee . to him, the definition of small business is a footnote. literally. "according to the joint committee on taxation , 94% of all u.s. businesses in 2007 were "s" corporations, partnerships, or sole proprietorships. pass-through business types commonly used by small businesses ." they call them pass-through companies because they file no taxes, passing through profits to the owners who report them on their individual tax returns instead. in short, they are considered small , not because they have a small payroll, but because they have a small number of owners. it's not the income that's small , it's not the number of employees that's small , it's just the total number of owners that's small . in the case of "s" corp .s, up to 100 owners. when politicians talk about small businesses , they are including any company that pays taxes as a pass-through. house democrats last week identified three limited partnerships that file as pass-throughs. a pipeline company called enterprise, the wall street firm, kohlberg, kravitz, and waters, and pricewaterhousecoopers. their own website lists partnership after partnership after partnership that make up a small business empire of 70,000 employees. according to the " washington post ," more than 1 million people who reported at least $200,000 in income in 2008 were partnerships and "s" corps. the richer you are, the more likely you are to call yourself a small business that way. 89% of americans who make more than $10 million a year filed as a partnership or an "s" corp . in 2008 , more than 500,000 of these supposed small businesses had more than $ 1 million in assets. in 2005 , almost 20,000 of them had annual receipts of more than $50 million. but if you want to know which companies these are, you are out of luck. because individual tax filings are not public record . still, some have revealed themselves. the "s" corp . association lobbying group is chaired by an executive of the hillman company, a small business founded by a billionaire. the "s" copper group president is from venn strategies, a small business whose chief operating officer is a former special assistant to president bush , whose president used to work for senate leader reid. directors of the "s" corp . group come from ferrellgas, which provides propane and propane accessories, with a small business touch to 1 million customers. a small business . coorstek, north america 's largest maker of technical ceramics, a small business founded by adolf coors. a small business . the dead river company, a small business with commercial real estate valued at $300 million. a small business . and a small business called maccel haney, selling their tabasco sauce out of their kitchen to 160 countries. a small business . "the boston globe " revealed in 2007 that fidelity investments was becoming an "s" corp ., a move that saved this small business hundreds of millions of dollars. similar to how a scrappy little newspaper call eed "the tribune," as in the " chicago tribune ," made an extra $1.9 billion by converting to "s" corp . status in 2008 . as tax reporter david k. johnston figured out, other companies get revealed as "s" corps when their filings become evidence in tax trials. that's how he identified one of the biggest small businesses in the world -- bechtel. a small business that builds airports, sea ports , railroads, oil refineries , nuclear refineries, but back when it was all just bechtel, they built the hoover dam . today, the world's number one engineering and construction firm, a small business . companies aside, who are the actual people who would benefit from the republican tax cut for the richest small businesses ? him, for one. bloomberg news reports the president and other big authors and actors and celebrities, even hedge fund managers, file as "s" corps to save on taxes. nor is mr. obama the only famous "s" corp . owner. recognize this guy? how about now? thanks to court documents reviewed by "countdown," we know one of texas' two richest men in the 1990s became an "s" corp . back in 1991 . senator john mccain knows about "s" corps. mrs. john mccain filed as an "s" corp . back in 2006 . a small business owner who owns a massive beer distributorship and reported income of more than $6 million. and then there's small business man philip anshoots. a small businessman who gave $30,000 to the senate republican campaign committee last year, and $15,000 to the house. on top of his family's more than $500 million to republicans over all. he owns small railroads, small oil companies , small sports stadiums, small arenas, a small national movie theater chain, a small half of small major league small soccer, the l.a. kings , the l.a. lakers . his small business entertainment company likes to clean out the old garage now and again to put on small shows by bette midler and cher. mr. anshoots even owns small newspapers, including "the weekly standard ." "countdown" has even identified one "s" corp . owner whose reclusive chairman actually works out of these very nbc headquarters in new york. hi. technically, i'm


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments