Published on Mar 28, 2012
Becerra: Last night there was breaking news that in my town of Los Angeles our baseball franchise, the Los Angeles Dodgers, just sold for $2 billion. They obviously have a high payroll for some of their employees. If they happen to have fewer than 500 employees would they qualify for this small business tax cut?
Barthold: Again, as has been noted there is no prohibition by type of enterprise or business. So if the Dodger organization under the common control test I just noted if they number fewer than 500 employees the Dodgers would qualify sir.
Becerra: Is that a yes? If the Dodgers have less than 500 employees yes they would qualify?
Barthold: Yes, yes they would sir.
Becerra: Would other sports franchises that pay their employees millions of dollars also qualify for this small business tax cut?
Barthold: Again there's no prohibition of enterprises engaged in sports.
Becerra: Okay so they would qualify as well. My understanding is that the Trump organization is a business that has about 300 employees. If it has 300 employees does the Trump organization qualify for a small business tax cut?
Barthold: Again we might look at a common control test if we're referring to Donald Trump since he's engaged in a number of different things...
Becerra: But let's say they pass that common control test
Barthold: If, as you have stipulated, if there were 300 employees then yes it would meet the definition and qualify to take the deduction up to 50% of wages paid or taxable income.
Becerra: So the Donald trump organization, if it has fewer than 500 employees, would qualify for some of that $46 billion dollar tax cut. My understanding is that Larry Flynt Productions has about 117 employees, so if they meet that qualifying test and have 117 employees, would they also qualify for that small business tax cut?
Barthold: Again, any entity, choice, S-Corp, C-Corp partnership...
Becerra: Mr. Barthold we can go through the exercise of you explaining it but I'm just trying to find out if the simple answer is yes.
Barthold: If they are less than 500, yes.
Becerra: So Paris Hilton Entertainment which has 5 employees and is based in Beverly Hills again if they meet for that criteria they qualify for that small business tax cut?
Barthold: Yes they would, sir.
Becerra: Another question, the legislation, does it limit any benefits to the tax cut solely to those business that create jobs? Is there a requirement that you create jobs?
Barthold: There's no requirement on the result of the tax relief.
Becerra: So you don't have to create a job to get the 20% tax cut?
Barthold: That is correct, sir.
Becerra: So let me ask you this. What if you fired an employee? Can you still get a tax cut?
Barthold: Your qualifying business...the simple answer is yes.
Becerra: Okay so if that's the answer; let me ask you this, what if a company fires an employee in the United States and lays off an American worker and then hires people abroad by outsourcing that job, could that company still qualify for that tax cut?
Barthold: They could still qualify, but remember there would be an effect on the wage limitation.
Becerra: Thank you very much, Mr. Barthold.
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