Another point worth pulling out separately from Thaler’s Economic View column today. The term “small business” is one where common public ideas and images are wildly divorced from how the government classifies and treats it. For most people, small business means a mom-and-pop store. To the IRS, it means nothing more than a business where the owners’ profits get reported as personal income on a tax form.
Partnerships and firms structured as S corporations are examples. This category can include businesses as diverse as barbershops, car washes, hedge funds and law firms. Goldman Sachs was in this category before it became a public company.