Austan Goolsbee: Eric Cantor Misrepresenting Obama's Economic Policies

Eric Cantor (R-Va.), the House Majority Leader, is misrepresenting what President Obama's economic policies actually are, says Austan Goolsbee, a former economic adviser to Obama and an economics professor at the University of Chicago.

As Cantor and Goolsbee sparred in an "economic showdown" on Bloomberg TV on Friday, Goolsbee refuted Cantor's claims about Obama's economic policies several times.

Cantor said on Bloomberg TV that Obama should "come out and say that taxes are not going to go up for small businesses." He said that small business owners he met in Richmond, Va., "did not think their taxes have gone down" and "are worried about their taxes going up."

Goolsbee explained that actually, "the share of income that small business people are paying in taxes is the lowest it has been in 65 years" -- since Obama "has cut taxes 18 or 22 times for small business."

Indeed, according to the White House's website, Obama has signed 18 small business tax cuts into law.

Goolsbee added that Obama supports extending tax cuts for most small businesses.

“The president is 100 percent for extending the tax cuts for 98.7 percent of small businesses," Goolsbee said. "The only question where there is disagreement is should the highest income rates above a quarter million dollars a year go back to where they were under Bill Clinton. That is the dispute about the taxes."

"Cutting high-income taxes by trillions of dollars in the 2000s did not work, and it will not work now," Goolsbee added.

Cantor also claimed that the key issue in this year's election is "the deficit, what is causing the deficit, and actually addressing it so we are not digging the hole deeper."

Goolsbee then noted that Republican Congressmen's proposals would increase the deficit even more: "That's why you should not increase the deficit by $5 trillion over 10 years by cutting taxes by that much."

The White House notes on its website that Republican Congressmen frequently conflate many of the wealthiest Americans with small businesses: Under Republicans' definition, at least 237 of the 400 highest-earning Americans would count as small businesses, the White House says.

Wealthy Americans that are "small businesses" under Republican Congressmen's definition include hedge fund managers and corporate law firm partners, since they earn "small business income," according to the White House. "Small businesses" under Republican Congressmen's definition also include rich Americans that receive income passively through investments and that get income from renting out property like a vacation home, according to the White House.

The government also classifies millions of people in the U.S. as "firms." As of 2007, there were 21.7 million "nonemployer firms" -- that is, people working for themselves -- in the country, constituting 78 percent of all businesses in the U.S., according to the U.S. Census Bureau.