Consider me old-fashioned, but I think “small businesses” are the relatively modest retail, manufacturing, mining and service enterprises spread around the country. They are run by people like Mike Guerriero, a gelati vendor I recently profiled. Mike hasn’t taken home $827 million from his business in any year, ever. You can argue that a gelati vendor isn’t as important to the economy as a hedge fund and is thus less worth bailing out, but that’s a separate and subjective rabbit hole. At least one counterargument is that a vendor may get permanently sidelined by the corona-crisis, while a hedgie, if he or she has been smart, has already saved years’ worth of survival money and can bounce back more readily after things settle down.
In that context, it might have been useful for legislators to move beyond headcount when defining eligibility for a small business bailout. Being “vulnerable” is just as important as being “small,” and right now some businesses are more vulnerable than others.
Hedgies who think I’m being too strict can find solace in the tax code. More than 80% of the benefits of a tax reform legislators embedded in the CARES Act will reportedly go to those who earn more than $1 million annually on “pass-through” income — making hedge fund investors and real estate developers like President Donald Trump prime beneficiaries.
This article was provided by Bloomberg News.