Wealth & Money Quote by Austan Goolsbee

The line lands like a scalpel aimed at the cozy mythology of “small business.” Goolsbee isn’t defending higher taxes or lower ones so much as he’s attacking a category mistake: the way policy language gets gamed until it stops describing real storefronts and starts sheltering highly paid professionals with clever accounting.

His specific intent is to puncture the political talisman that “small business” has become in Washington. When lawmakers cite small businesses as the fragile engine of Main Street, they’re often leaning on statistics inflated by entities that are “small” only in a legal or tax sense. A lobbyist or lawyer “setting up shop” can be a single-person corporation that routes income through pass-through structures, exploiting gaps between personal and corporate taxation. By calling it “something like a tax loophole,” he signals both the technicality (it’s legal) and the moral haze (it’s functionally a dodge).

The subtext is sharper: this is how inequality hides in plain sight. If you can reclassify high-end professional income as “small business” activity, then broad tax cuts marketed as help for mom-and-pop enterprises start operating as subsidies for the already comfortable. The phrase “that is what this is counting as” is doing the heavy lifting, pointing to the quiet power of measurement: once the definition is compromised, the debate is too.

Contextually, it’s an economist-insider warning about how incentives metastasize. Bad taxonomy becomes bad policy, and bad policy becomes a talking point that never dies.